The number of insolvencies is expected to surpass 1,000 this year for the first time in a decade as hospitality, retail and construction companies struggle to stay afloat.

Figures published by Deloitte show corporate insolvencies increased by 212 or a third (+32%) to 875 in 2024, the highest level since 2016 (1,032), the last time insolvencies exceeded 1,000.

James Anderson, turnaround and restructuring partner at Deloitte Ireland, said insolvencies had risen by an average of 30% every year from 2022 to 2024, and that a 15% increase in 2025 would bring the total to 1,006.

Deloitte previously forecasted that there would be 900 insolvencies in 2024. Leinster had the highest number of insolvencies in 2024 with 677 in total, accounting for 77%.

There were 117 in Munster, 68 in Connacht and 13 in Ulster.

The services sector, which included real estate, educational services and fitness & beauty, recorded the highest number of insolvencies in 2024 at 333 (38%), followed by hospitality at 147 (17%) and retail at 97 (11%).

There was a significant increase in the retail and hospitality sectors, up 64% and 48%, respectively, and insolvencies in IT more than doubled year-on-year from 17 to 37.

Over the last four years, there has been a significant increase in the level of insolvencies in the hospitality sector, suggesting that many businesses were able to continue operating due to government Covid supports.

There were 31 insolvencies in the hospitality sector in 2021, rising to 61 in 2022, 99 in 2023 and 147 in 2024.

Creditors voluntary liquidations (CVLs), a process in which businesses enter liquidation when they can no longer meet their financial obligations, accounted for three-quarters (76%) of insolvencies.

Only 3.5% of insolvent companies went through the Small Companies Administrative Rescue Process (SCARP), which amounts to just 30 of the 875 total, compared to 33 in 2023.

“The increase in insolvencies in Ireland in 2024 was largely down to higher costs of doing business for SMEs, the ending of debt warehousing in 2024 and the limited working capital supports available resulting in the business owners using personal resources to meet cashflow pressures," said Anderson.

“Small businesses, in particular, are being affected by these issues. The SCARP process was introduced to help businesses to restructure debts, however, take up levels remain lower than anticipated.

"The availability of an opt-out provision for state creditors agency is unique when considering international corporate restructuring processes and this is impacting take up levels."

Photo: James Anderson. (Pic: Supplied)