Business failures in Europe fell by 3.4 per cent to 81,856 in the first half of 1999 compared with the corresponding period in the previous year, according to business information specialists Dun and Bradstreet. Of the 13 economies analysed the Republic had the third highest reduction in business failures with a 13.8 per cent drop, after the Netherlands and Sweden. First-half 1999 failures were 11 per cent lower than in the corresponding period of 1997.

The figures, which also show that the rate of the fall in business failures increased between the first and second quarters, are further evidence of the recovery in many European economies and indicate an encouraging medium to long-term outlook for the region, according to the company.

Business failures increased in only two of the 13 economies analysed - Belgium, with a 3.6 per cent increase, and Britain, where failures rose by 10.7 per cent. The sharpest decline in business failures was in the Netherlands with a 22.7 per cent drop, but the fall was boosted by new creditor legislation. Sweden had the next highest fall with a 20 per cent decrease.

German figures for the first half were almost static with a fall of just 0.9 per cent.

Commenting on the results, Dun & Bradstreet managing director Mr Greg Connell said "Ireland's performance contrasts sharply with the UK. However, stronger inflationary pressures are likely to emerge in the second half of the year as the price of imported goods rises due to the euro's relative weakness against the dollar and sterling."