- by Patrick Cooney on 16/02/2021
Ireland's insolvency figures dropped for the third consecutive year in 2020 despite the COVID-19 pandemic, according to the latest figures from the CRIFVision-net Annual Review 2021.
The overall insolvency rate for 2020 was down 10.7% compared to 2019, totaling 570 insolvencies for the year. This decrease in insolvencies levels for 2020 can be widely attributed to the prolonged closure of courts during the Covid-19 pandemic as well as the suspension of activities for many businesses.
Within this period, the largest numbers of insolvencies were recorded in the month of February, with a total of 76 insolvencies; this was an increase of 69% compared to February 2019. April proved to be the least insolvent month: a total of 19 insolvencies were recorded, down 55% on 2019.
With regards to closures (most companies can be dissolved for reasons other than insolvency e.g. reaching the natural end of its life) start-ups exceeded closures by 12,830 entities. In total, 9,094 Irish companies were dissolved in 2020, down 26% on last year's figure (12,335) - outnumbering closures for the 11th year in a row.
The decrease in closures (and insolvencies), despite economic uncertainty could be attributed to businesses waiting to see the outcome of the pandemic while also being able to survive on Government assistance. With this, there are now over 249,000 companies trading as normal in Ireland, representing a 6.4% net gain in companies.
Of the 9,094 companies that closed in 2020, 25% closed before completing 4 years in business and almost half closed by year 8.
Commenting on the 2020 figures, Christine Cullen, Managing Director of CRIFVision-net, said:
Given the unpredictable nature of the Covid-19 pandemic, it is difficult to measure the full economic impact of restrictions and lockdowns. From the early stages of the pandemic, the Government was quick to provide support for SMEs and new business start-ups, introducing a range of measures that have been consistently extended and adapted in line with Covid-19 developments. While these supports have played a vital role in facilitating early recovery, the concern now is that the return to lockdown restrictions will reverse the progress that has been made so far.
The full 2021 Review is available to view in full below: