New figures show the number of corporate insolvencies in the first quarter of 2020 is down 18% from last year.
The number of insolvencies stands at 159, according to Deloitte, down from 195 a year ago.
However the firm says changes in circumstances - particularly the COVID-19 pandemic - mean that we can expect an increase
David Van Dessel is partner of financial advisory at Deloitte.
He said: "The decrease in corporate insolvency activity has been a consistent trend in recent years as we move further away from the 2008 financial crisis, but the anticipated economic impact of COVID-19 might change the direction of that trend in the near future.
"Irish corporates have been faced with having to take extremely difficult measures in doing their part in the battle against COVID-19, which will obviously have a major impact on their finances."
According to a recent Chambers Ireland survey, more than 60% of Irish companies have discussed an extension of payment terms with creditors - particularly with landlords, banks and the Revenue Commissioners - and 20% of companies have laid off their entire workforce.
"It is arguable that the current crisis has created the most significant challenge for otherwise viable Irish companies and it may therefore be the case that as the year progresses, the Irish business community will experience an increase in the utilisation of examinership as a process to facilitate corporate restructurings in companies with a reasonable prospect of survival.
"However, as things stand the mechanics of many insolvency processes are hindered by the current lockdown," he added.
Some 24% of the insolvencies recorded during the first quarter of 2020 relate to companies less than five years old, 25% are in the five to 10 years bracket, and 24% are in the 10-20 years bracket.
Just 8% are 20 to 30 years years and 9% of insolvent companies are over 40 years old.
Geographically, the highest number of corporate insolvencies was recorded in Leinster, with 68% of total appointments and consistent with the same period last year.
Munster had 23% of appointments and Connaught and Ulster both had 4%.
Top sectors
Looking at the top four industry sectors, the service industry once again recorded the highest number of corporate insolvencies with 54 appointments - or 34% of total insolvencies.
Financial services companies accounted for the largest number with 20, compared to 17 financial services insolvencies in 2019.
Personal services companies also featured prominently with 15 insolvencies recorded during the quarter.
And the retail sector recorded the second highest level of insolvencies with 34, representing 21% of the total number.
However, 11 of the 34 insolvencies refer to related entities within one group.
Deloitte says taking this group as one entity, the figure for the retail sector would actually be 23.
Other notable movements in insolvency numbers have been seen in the wholesale sector, which recorded an increase of 150% from a low of four corporate insolvencies in 2019 to 10 in 2020.
And the motor sector recorded a decrease from seven corporate insolvencies in 2019 to two in 2020.
