News Archive
Construction insolvencies soar in Ireland
Released on 17/07/2008
Out of 310 corporate failures in Ireland in the first six months of this year, 130, or 40%, were in the construction sector, according to a report.
The FGS all-Ireland financial advisory partnership calculates that there were just as many failures in the first six months of this year as there were in the whole of 2007.
Overall there has been a 76% growth in corporate failures compared with the first six months of last year.
The firm’s insolvency partner Declan Taite said that “the figures are alarming against a backdrop of interest rate rises, increasing unemployment, inflationary pressures and the ongoing credit crunch.”
He added: “The failures in the construction sector are generally small developers and or sub-contractors… It is likely that margins for sub-contractors will continue to be eroded due to increased competitiveness.
“The next 12 months in the sector will be interesting to say the least.”
While this report came from Dublin, in Northern Ireland the Ulster Bank, which maintains a construction purchasing managers’ index (PMI), said that for the third month in a row the PMI showed new orders contracting at a record pace.
In May the PMI showed the worst rate of decline since the survey started eight years ago, though it has been signalling contraction every month for the past twelve.
The Ulster Bank survey said housing is the worst performer among the main construction sectors.
