Increase in Dutch bankruptcies in 2023 will continue

A few weeks ago, Statistics Netherlands (CBS) reported that in August 12 more companies were declared bankrupt than in July, an increase of 5%. The number of bankruptcies has been higher for 16 months in a row than in the same month a year earlier. It is to be expected that this trend will continue for some time to come.

The number of bankruptcies has fluctuated significantly in the last 10 years, declines and increases follow each other quickly. The number of declared bankruptcies in the Netherlands peaked at 911 in May 2013. After that, the number of bankruptcies decreased until August 2017. Subsequently, the trend remained relatively flat until mid-2020. Subsequently, the number of bankruptcies continued to decrease and reached a record low in August 2021 with 109. As of May 2022, the number of bankruptcies was continuously higher than in the same month a year earlier.

Most bankruptcies in trade
In August, 308 companies and institutions ( including sole proprietorships ) were declared bankrupt. Of all industries, trade had the largest number of bankruptcies, namely 86. That’s 52 more than in July. However, the number of bankruptcies in the trade was relatively low in July. The increase was 20 compared to June. Trade is one of the industries with the most companies. Relatively speaking, most bankruptcies were declared in the transport and storage sector in August.

Allianz Trade
Johan Geeroms, Director Risk Underwriting Benelux at Allianz Trade, can draw an international comparison like no other. For example with Belgium. “Let me first say that the Netherlands is doing well. The state economy is in excellent order. Particularly when it comes to public debt compared to gross national product. The Netherlands is among the best boys in the class with a percentage between 60% and 65. The Netherlands is among the best boys in the class with a percentage between 60% and 65.

The Netherlands has been a leader in providing corona support, mainly due to this budgetary space. “A luxurious position,” says Geeroms, but the greater the support, the bigger the boomerang can be. “That is why we predict an increase in the number of bankruptcies in the Netherlands of 52 percent this year. Belgium already suffered that blow last year, with an increase of forty percent.”

The Netherlands also a leader in 2024
According to Allianz Trade’s research department, the number of bankruptcies is nowhere as high as in the Netherlands. Next year the number of bankruptcies will increase by 58%. A total of 44 countries were examined. The Netherlands emerges as a frontrunner. Johan Geeroms: “As an open export country, the Netherlands is always ultra-sensitive to international developments. The economic downturn is hitting us hard here. You could also question government support. Many SMEs complain about its effectiveness. What also plays a role is that a large number of companies have to repay their corona debts. Nearly 300,000 entrepreneurs together have a debt of more than 19 billion euros.”

Increase in the Netherlands due to corona debts, energy prices, high interest rates and economic downturn
In the Netherlands, companies often run into problems because they have to repay corona debts. In addition, many companies are struggling with increased energy prices, high interest rates and the economic downturn as a result of the war in Ukraine. This sum of factors is expected to lead to a significant increase in the number of bankruptcies.

Sources: CBS, VVCM, Allianz Trade
Photo: Shutterstock