Downward trend in insolvencies continues into 2025

PwC’s latest Insolvency Barometer, analysing insolvencies for the first quarter of 2025, published today, reveals that the downward trend in insolvencies seen in 2024 continues. 

First quarter of 2025 sees a decrease in insolvencies

The first quarter of 2025 recorded fewer insolvencies compared to each preceding quarter of 2024 and continues the downward trend identified in the last quarter of 2024. There were 14% fewer insolvencies in the first quarter of this year (192) compared to the first quarter of 2024 (222). Similarly, there were 7% fewer insolvencies in the first quarter of this year compared to the last quarter of 2024 (207).  This trend highlights that the Irish economy and many Irish businesses continue to demonstrate resilience, despite geopolitical challenges.

There were 852 insolvencies in 2024 in total, markedly lower than the 900+ insolvencies expected for 2024. 

The insolvency rate per 10,000 businesses has more than doubled since 2021 but remains below 20-year average

PwC’s latest Insolvency Barometer shows that the current annual insolvency rate is 29 per 10,000 businesses, more than double the rate of 14 per 10,000 recorded in 2021.  It still remains below the 20-year average of 50 per 10,000 businesses, and far below the previous peak of 109 per 10,000 businesses recorded in 2012.

Retail demonstrates resilience post Christmas

Retail recorded only 25 insolvencies for the first quarter of 2025, a significant decrease of 40% compared to the same quarter in 2024 (42). This also marks a notable decrease compared to each quarter in 2024, specifically a 38% decrease on Q4 2024 (40).

Hospitality insolvency levels remain largely in line with 2024

Hospitality recorded 43 insolvencies in the first quarter of 2025, which is largely in line with the preceding quarters of 2024. For example, there were 40 hospitality insolvencies in the last quarter of 2024, and 154 in total for last year. This consistency suggests that the sector is maintaining its current stability despite ongoing economic challenges. Our analysis also shows that most of the insolvencies are predominantly small restaurants & cafes.

Q1 sees an increase in lender enforcement

Receivership appointments increased by 57% in the first quarter of 2025 compared to the same quarter last year, with 36 and 23 appointments recorded respectively. Additionally, receivership appointments increased by over 70% compared to the 21 recorded in the final quarter of 2024, showing a significant rise in lender activity. Despite this increase, the current levels are still below historic norms. Over the past 6 months, 20 different lenders have enforced on their debt through receivership.

Use of rescue processes remains underutilised

The number of rescue processes recorded for the first quarter of 2025 remains consistent with preceding quarters, with 1 Examinership and 8 SCARPs recorded. Despite the consistent figures, the overall use of rescue processes remains underutilised.

Revenue enforcement activity leading to an increase in court liquidations

There were 25 court-appointed liquidations recorded in the first quarter of 2025, over three times the number compared to the same quarter in 2024 (7). This continues the upward trend of court appointments that started in early 2024. Revenue is listed as the petitioner for 16 of the appointments in the first quarter of 2025, suggesting that a number of phased payment arrangements (PPAs) agreed at the cessation of the debt warehousing scheme have potentially failed, making enforcement action necessary to recover these debts.

Lowest number of CVLs recorded in two years

There were 122 Creditors’ Voluntary Liquidations (CVLs) recorded in the first quarter of 2025, a 33% decrease compared to the same quarter in 2024 (184) and the lowest number recorded since the first quarter of 2023 (119). CVLs remain the most common form of insolvency, accounting for more than three-out-of every five insolvencies in the quarter.

Companies declaring insolvency had an average lifespan of nearly 11 years

The average lifespan of companies declaring insolvency in quarter one of 2025 was just under 11 years, down from 13 years reported in PwC’s last Insolvency Barometer. The shortest-lived company was less than 2 years old, while the longest lifespan was almost 73 years.

Top five counties account for 80% of insolvencies

Dublin, Cork, Kildare, Galway, and Wexford account for 4 out of every 5 insolvencies for the quarter, with Dublin alone accounting for 3 out of every 5 insolvencies.

Ken Tyrrell, Business Recovery Partner, PwC Ireland, commented: “The continued year on year decline in insolvencies demonstrates the robustness and resilience of our economy.  However, with the prevailing economic uncertainties and geopolitical risks looming, it remains to be seen what the year has in store.  Nothing is certain and businesses will also need to deal with a higher cost base in 2025 driven by domestic and international factors.  I would advise businesses to focus on their core strategies, cost base and actively manage their working capital to ensure that they are financially sustainable into the future.”