- by Patrick Cooney on 12/03/2020

2019 saw the lowest number of insolvencies since before the economic crash, just 617 companies going out of business due to insolvency. Thankfully this trend has continued so far in 2020. Of course the economic impact and outcomes of COVID-19 and Brexit still remain open and uncertain, but for the time being the economy remains strong. We're taking a closer look at the 'risk levels' of top sectors of Ireland's economy, to see which industries are showing less risk and which are still displaying symptoms of higher risk. We have analysed key factors of all industries from Agriculture to Hospitality to give an overview of what are the most and least risky to do business with so far in 2020.

Top 5 Riskiest Industries

1) Hospitality

Avg. Credit Score = 68

Insolvencies 2019 = 73

Closures = 812

Start-ups = 1,292

2) Computers

Avg. Credit Score = 75

Insolvencies 2019 = 23

Closures = 1,051

Start-ups = 1,389

3) Construction

Avg. Credit Score = 75

Insolvencies 2019 = 73

Closures = 1,033

Start-ups = 2,242

4) Mining

Avg. Credit Score = 74

Insolvencies 2019 = 0

Closures = 31

Start-ups = 25

5) Trade & Retail

Avg. Credit Score = 75

Insolvencies 2019 = 102

Closures = 1,485

Start-ups = 2,041

Our analysis shows that even though the country is seeing a boom in the hospitality industry, up 37% since 2012 (943 vs 1292 new start-ups) it remains one of the riskiest industries to do business in Ireland. The average credit score is the lowest for this industry.

As the country battles a housing crisis the construction industry sits as the third riskiest. More and more construction companies are needed to fuel high demand, in this case demand does not equal stability and construction as it always has been remains a very risky industry.

Trade and Retail saw the most insolvencies of the top 5 riskiest industries with 102 companies or 16% of the total number of insolvencies in the year. Along with Computers the top 5 made up 42% of all insolvencies last year.

Top 5 Least Risky Industries

1) Agriculture

Avg. Credit Score = 81

Insolvencies 2019 = 3

Closures = 99

Start-ups = 655

2) Health

Avg. Credit Score = 80

Insolvencies 2019 = 12

Closures = 442

Start-ups = 785

3) Public Admin

Avg. Credit Score = 82

Insolvencies 2019 = 1

Closures = 29

Start-ups = 20

4) Fishing

Avg. Credit Score = 78

Insolvencies 2019 = 2

Closures = 22

Start-ups = 48

5) Community Service

Avg. Credit Score = 76

Insolvencies 2019 = 42

Closures = 1,272

Start-ups = 2,875

A huge drop in insolvencies is seen when looking at the top 5 least risky industries. Apart from Community Service which saw 42 insolvencies the remainder of the top 4 saw only 18 insolvencies between them, defending the fact that these remain as the least risky of all industries.

The primary sector looks strong as Agriculture and Fishing both make the Top 5 with positive average credit scores at 81 and 78 respectively even though Brexit has led us to believe it would be hardest hit.

Public Administration has the highest average credit score of all 19 industries at a strong 82, a far cry from the lowest average credit score on the list: 68 for Hospitality.

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