Soaring Business Collapses Across Western Europe: A New Record
Record-breaking surge in insolvencies among corporations across Western Europe, last observed in 2013. - Record-breaking Bankruptcies surge in Western Europe for the first time since 2013
Get ready for some disturbing numbers—a staggering 190,449 cases of businesses shutting down! That's an increase of 12.2% compared to the previous year, according to Creditreform, a credit agency. And guess what? The grim trend seems to be continuing.
Patrik-Ludwig Hantzsch, the head of Creditreform Economic Research, shed some light on the situation. "Three years of economic downturn haven't just hit Germany; Europe as a whole is reeling from weak economic development," he explained.
Chronic crises have left businesses little room to breathe, let alone recover. Since 2021, when corporate insolvencies hit a low of 112,686, the number of business failures in Western Europe has skyrocketed by nearly 70%. Ouch! The reasons aren't just the pandemic; rising energy prices, sluggish demand, and geopolitical uncertainties have all taken a heavy toll on businesses.
In 15 out of 17 Western European countries, the number of insolvencies has increased annually. France was the hardest hit, with 66,088 companies collapsing last year—a whopping 17.4% increase. Notably, the numbers in Greece, Ireland, and Netherlands jumped by immense 42.5%, 32.0%, and 31.7%, respectively.
Germany is one of the main players contributing to the rising insolvencies in Western Europe, with 22,070 companies filing for bankruptcy last year—an increase of 22.5% compared to 2023. However, the Federal Statistical Office's numbers are a tad lower due to a different counting method.
Only Denmark and the UK posted fewer corporate insolvencies than the previous year, with decreases of 11% and 4.8%, respectively.
The construction industry took a major beating in 2024, with a 15.4% increase in insolvencies due to surging construction costs, high financing costs, and waning demand. The service sector also faced a significant surge in insolvencies, climbing by a hefty 14.2%.
- Business failure
- Economic downturn
- Insolvency
- Germany
- Europe
- Chronic crisis
- Neuss
- Patrik-Ludwig Hantzsch
- Coronavirus
- Constructioin industry
Insights:
The root causes of these soaring business failures across Western Europe include economic downturns, structural issues, and regulatory pressures. These collapses have significant implications, leading to unemployment, economic contraction, and financial system instability. The countries affected most severely are Greece, Spain, Italy, the UK, and France.
- Patrik-Ludwig Hantzsch, from Creditreform Economic Research, attributes the staggering increase in business failures in Western Europe to three years of economic downturn and chronic crises.
- The construction industry experienced a 15.4% increase in insolvencies in 2024, as a result of surging construction costs, high financing costs, and decreased demand.
- Economic downturn has not only affected Germany; Europe as a whole has been hit hard due to weak economic development, leading to a skyrocketing number of business failures.
- France, Greece, Ireland, and Netherlands are among the countries that have reported significant increases in business failures, with France bearing the brunt of the pandemic and other economic woes with a 17.4% increase in insolvencies last year.
