Sharp Rise in Western European Business Bankruptcies: A Cause for Concern
Western European corporate bankruptcies surge significantly once more - Business failures in Western Europe rise once more
Stepping away from the rosy assumption that Europe is recuperating, Patrik-Ludwig Hantzsch, head of Creditreform Economic Research, sheds some troubling insights. Instead, Europe is grappling with a sluggish economic recovery. Hantzsch points to a fierce competition, leading to an unsettling escalation in bankruptcies across Western Europe—a trend that isn't simply a catch-up from the corona chaos.
Intriguingly, 15 out of the 17 Western European countries scrutinized showcased a surge in bankruptcies. Only Denmark and the UK seem to have bucked the trend. The most substantial jump, however, was calculated in Ireland, Greece, and the Netherlands. While Germany witnessed a 22.5% surge, France notched up a 17.4% climb.
Industries feeling the heat the most, as per reports, are within the construction sector, given a staggering 15.4% increase. The credit agency attributes it to escalating construction costs, increased financing expenses, and the dwindling market demand, propping up the economic strife for the industry.
Delving deeper, much of Central and Eastern Europe also experienced a marked increase in corporate bankruptcies, with countries like Poland, Latvia, Slovenia, Lithuania, and Estonia registering a notable spike. However, a surprising drop in Hungary, where numbers surged dramatically in 2022 and 2023, brings forth a noteworthy fluctuation.
Peering further across the Atlantic, corporate bankruptcies in the USA saw a jump by 16.6%. Despite moderately robust economic growth, high-interest rates and dwindling consumer spending have strained businesses, as explained by Creditreform. Interestingly, the American figures remain below the pre-Corona era of 2018 and 2019.
- Bankruptcy Spike
- Creditreform
- Western Europe
- Germany
- Patrik-Ludwig Hantzsch
- Coronavirus
- Recession
- Economic turmoil
- Construction industry
- Credit agency
- Poland
- Latvia
- Slovenia
- Lithuania
- Estonia
- USA
- Hungary
Additional Details:
- The surge in bankruptcies across numerous sectors is fueled, in part, by high energy costs, a shadow casting uncertainty over many businesses' financial stability[1].
- The volatile global economic climate, characterized by weak demand and ongoing uncertainties, is further impairing companies' resilience[1].
- Thewhole scenario is compounded by relentless geopolitical unrest, making it daunting for businesses to anticipate and plan strategically[1].
- The interlocking crises plaguing the world economy, such as the COVID-19 pandemic, hinder businesses from fully recuperating before confronting new challenges[1].
- The surge in bankruptcies across several sectors, including the construction industry, is attributed to factors such as high energy costs, a volatile global economy with weak demand and ongoing uncertainties, and geopolitical unrest, as revealed by the credit agency Creditreform.
- Patrik-Ludwig Hantzsch, head of Creditreform Economic Research, attributes the escalating bankruptcies in Western Europe, particularly in countries like Germany, France, Ireland, Greece, and the Netherlands, to fierce competition and a sluggish economic recovery.
- Despite a 22.5% increase in bankruptcies, Germany still experienced a lower number of corporate insolvencies compared to the pre-Coronavirus era of 2018 and 2019.
- In contrast to the trend of increasing bankruptcies, Denmark and the UK are the only two Western European countries that have managed to buck the trend, demonstrating resilience in the face of economic turmoil.
