Soaring Corporate Insolvencies across Western Europe: A Growing Concern
Significant surge in corporate bankruptcies observed once more in Western Europe - Business collapses in Western Europe rise once more
In a chilling reminder of the tough economic times, Patrik-Ludwig Hantzsch, the brain behind Creditreform Wirtschaftsforschung, spells out the reality: Europe is drowning in a pool of stagnant growth. The intense competition in the region has led to an alarming surge in corporate insolvencies across Western Europe, according to Hantzsch.
To put it plainly, it’s not just Deutschland that's feeling the heat. In a staggering 15 out of 17 Western European countries, including Ireland, Greece, and the Netherlands, the corporate insolvency numbers have skyrocketed. Denmark and the UK are the only exceptions, where the numbers have taken a nosedive.
The rise has been particularly steep in Ireland, Greece, and the Netherlands, with Germany registering a whopping 22.5% increase and France not far behind at 17.4%. The construction sector has been the hardest-hit, experiencing a 15.4% increase in insolvencies due to soaring costs, finance woes, and a slump in demand[1].
In Central and Eastern Europe, the corporate insolvencies story isn’t much different. Reports suggest a rise in insolvencies in Poland, Latvia, Slovenia, Lithuania, and Estonia[1]. However, Hungary's strong decrease in insolvency numbers, which had surged in 2022 and 2023, is a noticeable factor that has slightly brightened the overall picture.
Across the Atlantic, the United States hasn’t been spared either. Insolvencies in the US have risen by 16.6% despite moderate economic growth. High interest rates and declining consumer spending have been burdensome for businesses, keeping the numbers below pre-corona levels of 2018 and 2019[1].
Key factors contributing to the surge in corporate insolvencies across Europe and the US include rising energy prices, weak economic growth, geopolitical uncertainties, trade tensions, and structural shifts in industries[1][5]. These challenges seem to be widespread, with Austria expecting an uptick in insolvencies[3].
For a closer look at the situation in Ireland, Greece, and the Netherlands, we need to dive deeper into data from Creditreform or other financial analysts specific to these regions.
- Creditreform
- Western Europe
- Corporate insolvency
- Corporate bankruptcy
- Patrik-Ludwig Hantzsch
- Germany
- Construction industry
- Economic pressure
- Central and Eastern Europe
- USA
- Interest rates
- Consumer spending
- Patrik-Ludwig Hantzsch, from Creditreform Wirtschaftsforschung, has outlined that Europe is experiencing stagnant growth, with a significant increase in corporate insolvencies across Western Europe, including Germany, Ireland, Greece, Netherlands, among others.
- The construction industry has been the sector most impacted by this rise in corporate insolvencies due to soaring costs, finance difficulties, and a decrease in demand.
- In Central and Eastern Europe, countries like Poland, Latvia, Slovenia, Lithuania, and Estonia have also reported an increase in corporate insolvencies.
- Even in the United States, insolvencies have risen by 16.6% despite moderate economic growth, primarily due to high interest rates and declining consumer spending.
