Cork businesses are currently grappling with a surge in insolvencies amidst a challenging economic climate. Recent data from CRIFVision-net reveals that insolvencies in Cork have risen by a staggering 65%, marking the highest increase in business closures across the country. In comparison, Dublin experienced a 35% increase in insolvencies.
Several factors have contributed to this alarming trend, including the winding up of government pandemic supports and the mounting interest rates. Despite these adversities, the Irish economy has demonstrated resilience in the face of global economic uncertainty, high interest rates, and a rising cost of living.
Notably, there has been a notable growth in start-up activity, with a 7% increase in company start-ups during the first half of 2023. Key sectors such as hospitality, real estate, IT, financial services, and construction have thrived in this environment, while manufacturing has experienced a decline.
Remarkable developments in Cork include the acquisition of Cork accountants by a multinational private equity firm and Cork medical company PMD Solutions’ participation in a program supporting the UK’s National Health Service (NHS).
Trends in Insolvencies
The first half of 2023 witnessed a significant rise in business insolvencies in Cork, with a 65% increase compared to the previous year, while Dublin experienced a 35% increase in business closures, highlighting the challenging economic climate faced by businesses in these regions.
Cork had the highest increase in business closures, indicating the difficulties faced by companies in sustaining their operations. This can be attributed to several factors, including rising interest rates and the winding up of government pandemic supports. The economic uncertainty and the rising cost of living at a global level have also contributed to the increase in insolvencies.
In contrast, Limerick recorded a decline of 43% in insolvencies, suggesting a more stable business environment in that region. Galway also had a lower number of insolvencies compared to the previous year, further highlighting regional variations in business performance.
Start-up Activity
Start-up activity in Cork has shown growth in various sectors, with some experiencing significant increases while others have seen declines. In the first half of 2023, there was a 7% increase in company start-ups in Cork.
The cities of Dublin, Cork, and Galway benefited the most from this growth in start-up activity, with Bellwether sectors such as hospitality, real estate, IT, financial services, and construction seeing a rise in new businesses. However, the manufacturing sector experienced a 9% decline in new start-ups.
It is important to note that the growth in start-up activity in Cork is relative to a relatively low baseline in 2022. Overall, the increase in start-ups reflects the resilience of the Irish economy and its ability to attract entrepreneurial ventures despite the challenging economic climate.
Impact on Irish Economy
Despite the various challenges and uncertainties in the global economic landscape, the Irish economy has demonstrated remarkable resilience and stability.
Despite high interest rates, rising cost of living, and global economic uncertainty, the Irish economy has managed to remain resilient.
The country has experienced a 48% increase in insolvencies in the first half of 2023, with Cork seeing the highest rise at 65%.
However, this increase in insolvencies has not significantly impacted the overall stability of the Irish economy.
In fact, corporate tax receipts are up, and the Irish government has an €8bn budget surplus.
Additionally, the start-up activity in Dublin, Cork, and Galway has contributed to the growth of key sectors such as hospitality, real estate, IT, financial services, and construction.
Despite these positive indicators, it is important to remain cautious and monitor the ongoing economic challenges.
