CORPORATE FAILURES have increased by 76 per cent in the first six months of the year, as failures among small developers and subcontractors in the construction sector continue to increase, new figures reveal.

Between January and June 2008, 312 Irish companies were placed in creditors' voluntary liquidation, High Court liquidation, receivership or examinership, up by 76 per cent on the same period last year, when 177 corporate failures were recorded, according to statistics compiled by Farrell Grant Sparks (FGS).

Forty two per cent of all failures occurred in the construction sector, with 130 companies collapsing, an increase from 35 per cent in 2007 and 36 per cent in 2006.

"The ongoing reduction in house prices; significant decline in the numbers 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 indicate that much uncertainty is likely to prevail in the short term.

"It is likely that margins for subcontractors will continue to be eroded due to increased competitiveness," said Declan Taite, a partner with FGS.

Other notable industries where failures occurred included the hospitality sector, which accounted for 42 failures, and professional services, where 18 collapses occurred.

Dublin continues to account for the majority of failures, as some 143 or 46 per cent of all failures in the period took place in the capital.

However, significant increases in the number of failures were also recorded in Cork - 26 in 2008 as opposed to 12 in 2007 - and Galway - 16 in 2008 as opposed to 8 in 2007.

Mr Taite anticipates that the numbers of receiverships and examinerships will continue to increase throughout the remainder of 2008.