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Company bankruptcies: Austria with the strongest increase in Europe

“High inflationary pressure, a restrictive monetary policy and disrupted supply chains are increasingly threatening companies' profitability and cash flow. Many governments are trying to get the situation under control with tax measures. Whether the measures are sufficient depends above all on the energy crisis and the associated development of the recession,” says an analysis of thousands of macro-financial data from credit insurer Acredi together with Allianz Trade.

Europe: double-digit plus expected for 2023, Austria above pre-pandemic level for the first time

Europe will have to adjust to increasing insolvency figures over the next two years. Especially in France (2022: +46%; 2023: +29%), Great Britain (+51%; +10%), Germany (+5%; +17%) and Italy (-6%; +36%). a sharp increase is expected. Sectors such as the construction industry, trade and logistics are severely affected. It is primarily smaller companies that are suffering from inflation, skyrocketing energy costs and rising wages.

The trend reversal is also in full swing in Austria. By the end of September 2022, 3.553 companies had to file for bankruptcy**. This corresponds to an increase of 96 percent compared to the same period in the previous year and thus represents the strongest increase of all European countries. "By the end of the year we could have almost 5.000 company bankruptcies in Austria," estimates Gudrun Meierschitz, CEO of Acredia. “For 2023 we then expect the number to be above the pre-pandemic level for the first time. We are currently assuming an increase of 13 percent for 2023, compared to 2019 that would be an increase of 8 percent. "

For the first time in two years, global corporate insolvencies have increased again

The analysis assumes that the number of global company bankruptcies will increase in both 2022 (+10%) and 2023 (+19%). After two years of declining numbers, this signals a turnaround. By the end of 2023, global insolvencies could be back to pre-pandemic levels (+2%).

“A trend reversal has already started worldwide. Half of all countries that we analyzed recorded a double-digit increase in corporate insolvencies in the first half of 2022,” Meierschitz summarizes the development. "Even countries that currently have low bankruptcy rates, such as the US, China, Germany, Italy and Brazil, are likely to see increases next year."

The full study by Acredia and Allianz Trade can be found here: Corporate Risk is back – Watch out for business insolvencies (pdf).

Photo / Video: Shutterstock.

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