No Holds Barred: The Current Insolvency Crisis Sweeping Western Europe
Business failures in Western Europe escalate noticeably once more - Business failures in Western Europe are seeing another uptick.
Bleak Economic Scene Across the Continent
In the gritty world of Western Europe, Patrik-Ludwig Hantzsch, the fearless head of Creditreform Economic Research, paints a grim portrait of economic stagnation and downturn. "It ain't just Germany getting mobbed by recession," he says bluntly, "Europe as a whole is grappling with a weak recovery."
His words echo menacingly, as he points to the crux of the issue – intensified competition leading to a sharp increase in company insolvencies across the region. And make no mistake, these insolvencies aren't simply the sluggish fallout from the COVID-19 pandemic.
Chaotic Numbers
In 15 out of the 17 Western European countries inspected, the insolvency count is on the rise. In an ironic twist, only Denmark and the United Kingdom buck the trend with a decrease in insolvencies.
Notably, the increase has been particularly pronounced in Ireland, Greece, and the Netherlands, while Germany recorded a startling 22.5% jump, and France felt the sting with a 17.4% year-on-year increase.
The Hard-Hit Heartland
The construction industry has taken the brunt of the insolvency storm, witnessing a 15.4% growth in bankruptcies. The surge, the credit agency, with a wry grin, attributes to soaring construction costs, crippling financing costs, and eroding demand.
Across the Continent
In most Central and Eastern European countries, corporate insolvencies are rising, too, though the picture is quite different in Hungary, where numbers had spiked in 2022 and 2023.
Overseas Insights
Similar turbulence is hitting the shores of the USA, with the insolvency count rising by 16.6%. Creditreform explains how moderate economic growth, paired with high interest rates and dwindling consumer spending, are pinching corporations mercilessly. Yet, the numbers in the USA still trail below the pre-COVID-19 levels of 2018 and 2019.
Unfiltered Insights
Weak economic recovery, fierce competition, rising energy prices, high financing costs, dwindling consumer demand, stagnant growth, pandemic fallout, geopolitical uncertainties – it's a complex, tumultuous cocktail that's left businesses in Western Europe and the USA with little headroom to navigate their way to solvency.
In Other Words
Welcome to the wild West! Or, well, Western Europe. This cavalcade of companies teetering on the edge of insolvency paints a vivid picture of a region gripped by economic turmoil. Whether Germany, France, Ireland, Greece, the Netherlands, the USA, or any other part of this stormy sea, the winds of change are turning businesses upside down in Western Europe and the USA. And unless something drastic changes, the sentiment is, this storm ain't gonna be ending anytime soon.
* Western Europe* Creditreform* Company Insolvency* Business Insolvency* Credit Agency* Germany* Patrik-Ludwig Hantzsch* COVID-19* Neuss* USA* Economic Downturn* Stagnant Growth* Geopolitical Uncertainty* Record-High Insolvencies* Services, Retail, Construction
- Patrik-Ludwig Hantzsch, head of Creditreform Economic Research, has warned about the increasing trend of business insolvencies across 15 out of 17 EC countries, with Germany recording a startling 22.5% jump.
- The surge in insolvencies is not only affecting Germany, but the numbers have also increased significantly in countries like Ireland, Greece, and the Netherlands.
- The credit agency, Creditreform, has attributed the rise in bankruptcies in the construction industry to soaring construction costs, crippling financing costs, and eroding demand.
- In the USA, the insolvency count has risen by 16.6%, with moderate economic growth, high interest rates, and dwindling consumer spending being identified as key factors impacting corporations.
