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BUSINESS COMPANY START-UP GROWTH SLOWS IN FIRST THREE QUARTERS OF 2018 BUT INSOLVENCIES DECREASE BY 23%

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The figures, published today by business and credit risk analyst Vision-net, a CRIF company, suggest that Ireland’s fast rate of business growth may be entering a more mature phase of growth.Limerick was the only county in the top five to record an increase of more than +0.5% in the first nine months of the year, with company start-ups increasing by +15% (632 vs 549). Dublin, while the most popular county for new start-ups, recorded only a small increase of less than +0.5% (7,659 vs 7,635).

Conversely, insolvencies declined by -23% in Q1-Q3 2018 compared to the same period last year, indicating that established companies are maturing, able to service their creditors, and operating well in their markets.

Company start-ups

New business and company start-ups decreased by -7% in Q1-Q3 2018 compared to the same period last year (33,439 vs 35,911). In Q3 2018 alone, new business and company start-ups decreased by -10% on Q3 2017 (10,343 vs 11,520).

Q1-Q3 2018 company start-ups

– Professional services start-ups increased by +7% compared to the same period last year (3,485 vs 3,263).

– Construction start-ups increased by +8% (1,814 vs 1,683); related real estate start-ups increased marginally by +1% (744 vs 738).

Q3 2018 company start-ups

– Professional services and social and personal services were the only two industries in the top ten to record an increase in start-ups (respectively, +3% (1,066 vs 1,035) and +16% (696 vs 602)).

– Finance start-ups decreased by 6% (803 vs 858) and construction start-ups decreased by 4% (543 vs 565).

– All of the top five counties for company start-ups recorded decreases. Dublin recorded the most company start-ups (2,475) but this was a -4% decrease on the same period in 2017. Limerick, ranked fifth, recoded the smallest QoQ decrease (-2%, 186 vs 190).

Insolvencies

Company insolvencies decreased by -23% in Q1-Q3 2018 compared to the same period last year (596 vs 777). In Q3 2018 alone, company insolvencies decreased by -9% on Q3 2017 (207 vs 228).

Q1-Q3 2018 company insolvencies

– Construction recorded a -25% decrease in insolvencies (89 vs 119), real estate a -45.5% decrease (60 vs 110), and hospitality a -36% decrease (51 vs 80).

– Wholesale and retail was the most insolvent industry in this period (106 vs 95, +12%)

– Insolvencies decreased by -25% in Dublin (246 vs 329), -18% in Cork (56 vs 68), -42% in Galway(40 vs 69) and -25% in Limerick (24 vs 32).

Q3 2018 company insolvencies

– Construction insolvencies declined by -32% QoQ (21 vs 31), by -32% in real estate (15 vs 22) and by -44% in hospitality (18 vs 32).

– Wholesale and retail was again the most insolvent industry (47 vs 26, +81%).

– Dublin was the most insolvent county, but insolvencies decreased by -12% QoQ (84 vs 95). Meath, the second most insolvent county, recorded a +229% increase in insolvencies (23 v 7).

Looking overseas

Vision-Net’s parent company, CRIF has operations in 30 different countries around the world.  This week it published Quarter 3 data for its Swiss and German operations.  Like Ireland, professional services represented the highest rate of new start-ups in Germany and Switzerland.

In Switzerland and Germany the highest rates of insolvencies were seen in construction, wholesale / retail, professional services, hospitality and manufacturing.  Insolvencies in the German construction sector were particularly high.  They accounted for 20 percent of all Quarter 3 insolvencies, compared to just 10 percent of insolvencies in Ireland.

Commenting, Christine Cullen, Managing Director of Vision-net, said:

“While the slowdown in new business and company start-ups may come as a surprise to some, when combined with the decrease in insolvencies, the trend suggests that Ireland’s economy is in fact reaching a mature growth phase.

“New companies that survived the post-recession bounce-back are now established and operating well in their markets. Our European-level data suggests the rate of new start-ups is now on a par with high performing economies such as Switzerland and is even ahead of Germany, the EU’s largest economy.  The decrease in insolvencies in virtually all counties indicates that companies are generating enough to revenue to confidently service their creditors.

“Company and business growth, while decreasing, is still strong. However, there are number of factors that could accelerate a decline, including a shortage of talent.

“With this in mind, it is important that the Government prioritises education programmes that enable Irish professionals to keep their skillsets in step with the demands of a modern, globalised economy. It must also be easier to import foreign workers to fill long-standing gaps in our labour market, for example through visa waiver programmes.”

Commenting on the quarterly data, CRIF Regional Director for the UK and Ireland, Sara Costantini, said:

“CRIF is now advising a diverse range of organisations across Ireland and at EU-level, many of whom are currently positioning themselves for overseas growth.  This renewed export confidence in Irish business is particularly apparent in the likes of the professional services, finance and tech, and compares favourably to the equivalent European-level data we published earlier this week.”

Source: Irish

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