Sharp rise in failures among engineering firms
Date: 29-08-2006
Source: Irish Independent
THERE has been a marked increase in the number of construction and engineering companies being placed in liquidation, receivership or examinership in the first half of 2006, according to new figures. A total of 71 companies in the construction and engineering sector failed in the six months to June 30, compared to 55 for the same period in 2005, according to business advisers and consultants Farrell Grant Sparks (FGS). Construction and engineering represented 36pc of all business failures in the first half of the year. "This is notable when the continued buoyancy of the sector is considered and is indicative of high costs, undercapitalisation of new businesses and consolidation within the sector," FGS said. It said the problems were exacerbated by increased competitiveness following admission of accession countries to the EU and profit margins not being passed on by the main contractors to sub-contractors. Overall, 195 companies were placed in liquidation, receivership or examinership in the first half of 2006, a 6pc decline on the 208 failures in 2005. Failures within the hospitality services sector have reduced by almost half from 42 to 24, indicating development of this sector, FGS said. But failures in the retail industry continue to increase - 25 businesses failed in the first half of 2006, compared to 18 for the same period in 2005.
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