After this year’s sharp increase, the number of bankruptcies worldwide will increase by another +4% next year. By 2024, according to Allianz Trade researchers, 3 in 5 countries will exceed pre-pandemic insolvency levels. In total, the bankruptcy figures of 44 countries have been mapped.
Johan Geeroms, Director Risk Underwriting Benelux of Allianz Trade: “The trend is clear: the number of bankruptcies is accelerating. This, of course, has everything to do with the slowdown in growth in one hand and tighter credit conditions in the other. If you zoom in you see large local differences. In some countries we already saw bankruptcies peaking last year and they are now scoring slightly better. Take the United Kingdom. Last year +51%, this year +16%. A country where things are going really fast is France. Last year +48%, this year another +41%.”
No deferral for repayment of schemes to Dutch companies
Johan Geeroms about the Dutch situation: “We are now dealing with the downside of the generous support from the government during COVID-19. Many SMEs have to pay corona debts and back taxes. The tax authorities have sent tens of thousands of companies a final reminder. A large part of those companies cannot meet this requirement and will go bankrupt. State Secretary Van Rij of Finance recently informed the House of Representatives that no further postponement will be granted.”
According to the researchers, the normalization of bankruptcies in the Netherlands is in full swing after the large drop of -43% in 2021. In 2022, too, bankruptcies remained limited for a long time. After the +52% increase this year, Allianz Trade expects another +8% increase next year. In absolute terms, this amounts to 3,270 bankruptcies in 2023 and 3,530 cases in 2024. This is close to the average number of registered bankruptcies before the pandemic (3,760 in annual average over 2017-2019).
Johan Geeroms says about the eurozone that the sharp rise in bankruptcies is no surprise. “There is so much coming at companies. Profits are under pressure, partly due to higher wages and extra energy and financing costs. The resilience of the most vulnerable companies is being severely tested. This is even more problematic in sectors that find it difficult to raise their prices due to strong competition.” According to Johan Geeroms, retail, transport and construction are particularly vulnerable.
Johan Geeroms warns of large concerns that could collapse. “Our research shows that the number of bankruptcies of companies with a turnover of more than €50 million is already above pre-pandemic levels. Those large companies usually drag a whole host of small companies down with them.”
China scores well
It is striking that China has relatively few problems with increasing bankruptcies (this year +4%, next year +5%). Johan Geeroms: “The economy is fully benefiting from the reopening. But that doesn’t mean there are no risks. For example, the real estate sector is still far from healthy.”
Source: allianz-trade.com (dutch translation)