The number of insolvencies in the third quarter of the year was up 54% on the same period last year.
Between July and September, 185 insolvencies were recorded, compared to 120 during those three months in 2022.
But new data from credit risk analyst, CRIFVision-Net, shows that while insolvencies grew during that period, so too did startups.
5,154 new businesses were created compared to 4,593 in the third quarter of last year.
“Examining the third quarter of this year against last year presents a peculiar picture,” said Christine Cullen, Managing Director of CRIFVision-Net.
“Despite the presence of several global challenges, the determination of local entrepreneurs remains unwavering, showing a robust willingness to invest in new ventures.”
“The persistent nature of inflation however has emerged as a notable factor contributing to the elevated insolvency rates.”
“This interplay between inflation and interest rates has undoubtedly had an influence on the insolvency landscape.”
19 counties recorded company startup growth, with just seven seeing a year on year decrease versus the same period in 2022.
12 sectors saw an increase in startups, with hospitality, construction and IT recording the strongest growth.
However, real estate, saw a marginal 1% decrease in new company formations., with bigger contractions in education, utilities and agriculture.
There was a slight rise in insolvencies in education, leasing, and retail, all of which had relatively low initial numbers.
Cork recorded the highest number of new insolvency cases for the quarter, totaling 21.
“Looking ahead to the final quarter of the year and into 2024, as we prepare for the budget this week, it is increasingly crucial for the government to provide robust supports to businesses,” said Ms Cullen.
“These supports can help cushion the impact of inflation and interest rate fallout.”
“In the broader context, Ireland’s economic outlook continues to be optimistic, as seen through the growth in startups.”
“The resilience of its entrepreneurial spirit, coupled with a potentially improving inflationary conditions, provides reasons to be positive.”
“While challenges persist, there’s an underlying sense of confidence that Ireland’s business community will continue to adapt and thrive amid the challenges, especially with supports in place.”