14% increase in corporate insolvencies in Q2 2014 according to Deloitte has been saved
14% increase in corporate insolvencies in Q2 2014 according to Deloitte
Construction, hospitality, manufacturing, IT and wholesale sector insolvencies increase
Friday 11th July 2014. There was an increase of 14% in Q2 2014 corporate insolvencies recorded in Ireland when compared to Q1 2014, from 303 to 347, according to figures released by Deloitte, and published by www.InsolvencyJournal.ie today.
Commenting on the figures, David Van Dessel, Partner with Deloitte said: “The figures show increases across a number of sectors including construction, hospitality, manufacturing, IT and the wholesale sector. Although insolvency activity has increased from Q1 2014 to Q2 2014 there has been a decline of 8% when we compare H1 2014 (650) to H1 2013 (706). The types of insolvencies for the first half of 2014 show a reduction of 15% in Creditors Voluntary Liquidations and an increase in court liquidations and examinerships.”
- Q2 2014 corporate insolvencies at 347, an increase of 14% (Q1 2014: 303)
- Q2 2014 insolvencies in construction sector at 73, an increase of 14% (Q1 2014: 64)
- Q2 2014 insolvencies in hospitality sector at 46, an increase of 31% (Q1 2014: 35)
- Q2 2014 insolvencies in manufacturing sector at 23, an increase of 44% (Q1 2014: 16)
- Q2 2014 insolvencies in IT sector at 12, an increase of 33% (Q1 2014: 9)
- Q2 2014 insolvencies in wholesale sector at 9, an increase of 50% (Q1 2014: 6)
With regard to corporate insolvency types, creditors voluntary liquidations (CVL) increased 30% from Q1 (185) 2014 to Q2 2014 (241) examinerships increased 60% from Q1 2014 (5) to Q2 2014 (8) while receiverships decreased 12% from Q1 2014 (89) to Q2 2014 (78) and Court liquidations decreased 17% from Q1 2014 (24) to Q2 2014 (20)
Commenting on the outlook for the second half of 2014, David Van Dessel, Partner with Deloitte said: “It is interesting to note an increase in corporate insolvencies in Q2 2014 as one would anticipate a reduction in corporate insolvencies during 2014 – a trend we are observing when comparing the first half of this year with the same period last year. We expect this reduction to remain at the current pace. In particular the new examinership legislation, which commences operation on 14 July, should result in the process becoming substantially more accessible to SMEs, and we anticipate an increase in examinerships during H2 2014.”
Corporate insolvencies in the construction sector continue to show a consistent decline with a drop of 19% for the first six months of the year when compared with the same period in 2013; however the increase in corporate insolvencies in this sector from Q1 2014 to Q2 2014 is worrying. Yet, according to the Construction Industry Federation (CIF) more than half of Irish construction companies expect their business to grow this year, while three out of four construction companies will take on extra staff if they increase their revenue.
An increase of 31% in the hospitality corporate insolvencies from Q1 2014 to Q2 104 is disturbing news for the sector, with a recent report commissioned by the Irish Hotel Federation (IHF) revealing that Irish hotels are €5.3bn in debt, which is a decline from €6.7bn at the end of 2011 but the report noted that there is a further reduction of €1.4bn required if the hotel sector is to remain viable.
H1 2014 corporate insolvencies in the retail sector have shown an 18% decline from H1 2013, which can only be a positive for this industry. In May ahead of its annual conference Retail Ireland said that 2014 would see the start of a meaningful recovery in the retail sector predicting a consumer spending growth of nearly 2% this year. Furthermore, according to the Central Statistics Office (CSO) figures, the volume of retail sales increased by 0.9% in May 2014 when compared with April 2014 and there was an increase of 6.2% in the annual figure.
Corporate insolvencies in the motor sector for H1 2014 stood at 22, down just 1 from H1 2013 total of 23. With the introduction of the new ‘142’ registration plate at the start of July reports from The Society of the Irish Motor Industry (SIMI) were that 4,264 new cars were registered on the first day, this is a 120% increase on the same day in 2013. However Alan Nolan director general of SIMI cautioned that car sales are coming off a low base but noted that they hadn’t expected such a good start compared to last year.
About The Insolvency Figures
The data collected by InsolvencyJournal.ie is based on independent research and analysis of officially recorded data from daily newspaper notices and Iris Oifiguil publications conducted by kavanaghfennell (recently acquired by Deloitte) and is exclusive to InsolvencyJournal.ie.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/ie/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
The information contained in this press release is correct at the time of going to press.
Deloitte’s 1,350 people in Dublin, Cork and Limerick provide audit, tax, consulting, and corporate finance services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges.
Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.