Startups rise by seven per cent as insolvencies grow: A Mixed Economic Picture for Irish Businesses

Yesterday, CRIFVision-net published our Q3 2024 report on company start-up and insolvency rate, covering the period from July to September.

The standout takeaway is the notable rise in startups across Ireland, indicating strong market confidence despite broader economic challenges. In total, 15 counties recorded positive growth in company formations, while 10 experienced year-on-year decreases. Among the top performers were Wexford, Roscommon, Westmeath, Wicklow, all seeing a positive growth in startups.

Major urban centres such as Dublin and Galway saw positive growth reflecting continued entrepreneurial activity. However, not all urban regions fared as well, with counties like Cork (-8%) and Limerick (-4%) recording declines in new business ventures, signalling local challenges despite national trends

In total, new company formations increased by 7% year-on-year, amounting to 5,813 start-ups in Q3 2024. Key growth sectors included motor, real estate, manufacturing, and IT, each of which boasted double-digit expansion in start-up activity.

On the flip side, insolvency rates increased in Q3, with the construction, hospitality, legal and accounting sectors being hit the hardest.

Despite these impressive economic indicators, the view on the ground amongst many Irish business owners is more mixed. While certain industries are flourishing, others, particularly hospitality, are struggling to cope with rising costs and weakening demand.

In response to these challenges, the Government announced a number of targeted business support measures in Budget 2025, including the €4,000 ‘power-up’ energy grant. Meanwhile, the Minister for Enterprise, Trade, and Employment has pledged to shift his department’s focus toward supporting indigenous family businesses, SMEs, start-ups, and scale-ups across the country.

However, these supports may offer little reassurance to struggling business owners in the hospitality sector. Factors such as rising input costs, weak demand, and tightening credit conditions remain key challenges.

As Ireland continues to grapple with the ongoing housing crisis, it's encouraging that the Government has acknowledged the urgency by allocating a record €6 billion in capital funding for housing in this week's budget. However, the 127% increase in insolvencies within the construction industry, coupled with a modest 15% rise in new start-ups, signals ongoing challenges in addressing the housing shortage.

Rising material costs, labour shortages, and persistent inflationary pressures are making it increasingly difficult for many construction firms to remain viable, despite the growing demand for new housing.

Nevertheless, with sustained investment and strategic reforms, the sector has the potential to stabilise and contribute to meeting the housing needs of the country.

To learn more, please visit https://www.vision-net.ie

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