The number of businesses which became insolvent between July and September was up nearly two thirds on the same period last year.
New figures compiled by Deloitte show 238 firms entered insolvency in the third quarter, up 60% on a year earlier.
That brings to 650 the total number of insolvencies so far this year, more than a third more than in the first nine months of 2023.
Deloitte now estimates that the total number of insolvencies for the year could be more than 900, the highest level since 2017.
Turnaround and Restructuring Partner at Deloitte Ireland James Anderson told RTÉ's Morning Ireland that hospitality and retail businesses make up a large portion of cases.
"What the statistics are telling us is that SMEs are disproportionately affected, they represented 98% of restructuring activity levels. And in particular we are seeing highlighted increases across hospitality and retail," he said.
"Hospitality statistics year-to-date are 61% ahead of where they were in 2023 and retail is 72% ahead of where they were in 2023 and combined, they make up almost 30% of all restructuring insolvencies in 2024."
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"At the current activity level, corporate insolvencies in 2024 are on track to be 30% greater than 2023 with forecasted activity to be in line with 2017, which had 874 appointments."
Deloitte said the increase is being driven by insolvencies among small and medium sized enterprises (SMEs), which made up 98% of the activity.
So far this year there have been 108 insolvencies in hospitality, up 61% from the same period last year and significantly higher than the same periods in 2021 and 2022.
Deloitte said this is likely due to increased labour and energy costs, as well as the VAT rate rising to 13.5% and the cost of insurance.
"The cost of doing business in has significantly increased in recent years and unfortunately there are no signs of that abating." said Mr Anderson
"Energy materials and labour costs have all significantly increased and whilst the Government."
Since January there have also been 237 insolvencies in the services sector, representing 36% of the total recorded in the first nine months of the year.
Within that, there have been 76 insolvencies among financial services and holding companies, 41 among technical and professional services, 30 in real estate and 20 in entertainment.
Deloitte said there were nine appointments in the third quarter under the Small Companies Administrative Rescue Process (SCARP) – the procedure that aims to provide a more accessible and cost-effective restructuring process for smaller companies that are viable, yet insolvent.
That brings to 22 the total number of firms that have used SCARP so far this year, with 272 jobs saved.
"I would encourage SMEs (and their advisors) to consider SCARP as a viable option to supporting businesses and saving jobs," said James Anderson.
"The low number of companies using the process does not align with the positive impact and outcomes that the scheme has had."
