More pain and little gain from insolvency figures
DESPITE five consecutive months of falling unemployment, signs of financial strain remain evident among Northern Ireland households, according to new personal and corporate insolvency figures.
Northern Ireland corporate insolvencies were up 91% from May to June compared to January to March but were lower than the corresponding quarter in 2012
In the last quarter there were 105 company liquidations or corporate insolvencies here. Last year was a record year for corporate insolvencies in Northern Ireland with 410 in total.
However, the steep decline in the first three months of 2013 means that the latest four-quarter corporate insolvency total has fallen to 341. But the latter is 134% above the level that prevailed before the credit crunch began in the third quarter of 2007.
Since the credit crunch began, 1,800 firms in Northern Ireland have been declared insolvent.
Personal insolvencies here hit a record high of 3,189 in 2012, a trend which continued into 2013 with 3,330 insolvencies recorded over the last four quarters.
From May to June, 894 individuals were either declared bankrupt, chose bankruptcy, or entered into either an Individual Voluntary Arrangement (IVA) or a Debt Relief Order (DRO).
This represented a quarterly rise of 6.9% and was 12.5% above the corresponding figure for the same period in 2012.
The latest quarterly increase was driven by a 40% rise in DROs and a 14% increase in the number of bankruptcy orders.
Richard Ramsey (below), chief economist with Ulster Bank in Northern Ireland, said that an important factor behind Northern Ireland's surge in insolvencies is due to the fact that insolvencies were coming off a low base.
"In the second quarter of 2012, the number of corporate insolvencies was 57% lower relative to the corresponding quarter in 2012," he said.
"Clearly, Northern Ireland's corporates appear to be exhibiting more signs of financial distress than their counterparts in Great Britain.
"Two factors behind this are exposure to the property downturn and the Republic's economy.
"Despite the sharper rises in Northern Ireland's insolvency figures, the incidence of personal insolvency in Northern Ireland and England and Wales is broadly the same,
"It should be noted that Northern Ireland's corporate insolvency rate of 0.5%, which is corporate insolvencies expressed as a proportion of the business base, remains below that of England and Wales."