According to Trade Credit Brokers (TCB), an IFG subsidiary that sells protection against non-payment for goods and services, the number of bad debt referrals from its customer base was three times higher in the first quarter of this year than in the corresponding period in 2006.

TCB policy-holders must register potential problem accounts or probable losses with the broker when clients are unable to meet their credit obligations on time.

"We've seen the trend become progressively more alarming in the last three years, " said Celine Caulfield, TCB's commercial director. "There has been a flurry of activity recently with the registration of overdue and problem accounts."

Liquidations reached a three-year high in 2006, she said, and 2007 was already "looking worse", as the volume of claims relative to premiums at the underwriters TCB serves had climbed to 70% from less than 40% in 2004.

The claims-to-premium ratio is widely seen as a rough gauge of the health of the overall economy.

Many at risk companies have begun negotiating extended credit terms of 90 days and beyond . . . 30 to 60 days is normal . . . in an effort to stave off liquidation, Caulfield said. But as payments from troubled debtors arrive later, creditors suffer from reduced cash flow even as they have to spend more time and money on debt chasing and credit control . . . and so on, up and down the supply chain.

According to Caulfield, the construction sector, where many suppliers are dependent on one big customer, has so far been the "main indicator" of the liquidation trend. But there are signs of an "indirect knock-on effect" in other industries, she said.

Only about 20% of Irish businesses take out credit insurance. By its own estimate, TCB has a 50% share of this market, with representation at every level from multinationals to small and medium enterprises. It added Irish Ferries, Dairygold and Coillte to its client list in 2006, its best year yet for acquisitions.