Company failures jumped significantly in the final quarter of 1999, according to the latest statistics from credit agency Dun & Bradstreet.

There were 286 failures in the three months to end December, a rise of 85 per cent on the corresponding quarter in 1998. The increase reflects a strong rise in the number of new business start-ups over the last five years. The pattern of new ventures failing after two to three years, noted in the Republic, is similar to that witnessed in other strong emerging economies.

Forecasting gross domestic growth of 5.9 per cent this year, D & B Ireland managing director Mr Greg Connell warned that increasing shortages of labour and wage inflation were the greatest risks to the economy. Commenting on the latest figures he said: "Despite five years of strong economic growth, a recent four percentage point cut in corporate income tax, together with brisk interest rate cuts, company failures continue to hit unsecured creditors".

During 1999 a total of 749 companies failed, up from 638 failures for 1998 and 519 in 1997. Small businesses accounted for some 95 per cent of the failures last year. A breakdown of the figures shows that the manufacturing sector fared worst, accounting for 25 per cent of total failures for the year.

It was followed by the wholesale sector with 21 per cent of the failures and construction at 17 per cent.