Insolvency statistics for 2007 prepared by Declan Taite of Farrell Grant Sparks (FGS) show that 35 per cent of all failures last year occurred in the construction/engineering sector, with 71 of the 130 failures in the sector occurring in the second half of the year.

The number of failures that occurred in the second half of the year constituted a 20 per cent increase over the number of failures in the first half of the year.

"The generally accepted slowdown in the construction sector is obvious from the statistics, Tuite wrote in his end-of-year report. "The failures in the construction sector are generally small developers and/or subcontractors. The reduction in house prices, significant decline in the number of new units being built, uncertainty regarding the availability of credit for small- to medium-type developers, and the likely decrease in the number of people working in the sector, all indicated that much uncertainty is likely to prevail in the short term.

"It is likely that the margins for subcontractors will continue to be eroded due to increased competitiveness. The next 12 months in the sector will be interesting to say the least."

The figures compiled by FGS show the number of creditors' voluntary liquidations, High Court liquidations, receiverships and examinerships in the construction/engineering sector were: 130 in 2007; 116 in 2006; 104 in 2005; and 106 in 2004.