This is a record that the business community would have done well without. Business failures of large companies, those with more than 50 million euros in turnover, reached an unprecedented level in the third quarter of this year, according to a note from Allianz Trade. 127 cases of failures were thus recorded, an increase of 42 cases compared to the average before the Covid-19 pandemic. In total, insolvencies increased by 26% compared to 2023, with 344 companies failing over the first three quarters of the year.
« We are probably in a record year in the decade since this study was carried out. », notes Maxime Lemerle, head of failure research at Allianz Trade.
The sad record of business failures is reached
“With 344 cases in the first three quarters, this year's total already exceeds those from 2015 to 2019, 2021 and 2022 », completes the note from the company specializing in credit insurance. A risk which, in addition to employment, will also weigh on suppliers and subcontractors.
In this sad race, it is Western Europe which has taken the lead with six failures out of ten. 276 cases are thus to be identified out of the 436 cases of the last four quarters. On the podium, then come North America with 73 cases, then Asia-Pacific with 62 cases. Regarding the major powers, the United States recorded the most insolvencies (7) in the third quarter, then China (5).
Rising rates and catch-up effect
One of the first explanations for this problem is to be found in the rise in rates. “ The world is emerging from a phase of monetary tightening which was massive and rapid », underlines Maxime Lermerle. And despite the phase of monetary easing into which many countries, such as Europe and the United States, have entered, “ businesses continue to feel the effects of tightening », he adds.
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« Large companies face significant challenges, particularly in Europe. These include the general economic situation, but also structural changes in their sectors and the reshaping of value chains and global trade », Adds the Allianz Trade note.
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Another reason: businesses faced a catch-up effect after the end of business support measures granted during Covid. Increases in energy prices, especially in Europe, have also impacted companies. “Companies are once again facing reality, with increased pressure on costs, labor shortages forcing sectors to raise wages and even greater volatility in raw material costs », Lists the specialist.
Among the most affected sectors, services and retail trade are at the top, particularly in Europe and North America. Some companies have had difficulty making the switch to e-commerce or have taken it too late, explains Maxime Lemerle. The latter illustrates his point with the case of Tupperware. The group, weakened mainly by online commerce, declared bankruptcy in September.
The construction was also not spared. Failures in this sector have particularly hit the Asian continent as well as services. A consequence due to the increases in interest rates, cited above. In China, the real estate sector was particularly affected by the tightening of conditions for access to credit, thereby precipitating Chinese heavyweights such as the developer Evergrande which entered into liquidation in January.
“The level of failures is close to a historic record” (Gianmarco Monsellato, CEO of Deloitte in France)
A movement that affects all sizes of businesses
Beyond very large companies, all sizes are affected by these record failures. “ Generally speaking, all sectors, company sizes and regions are concerned, it is widespread “, says Maxime Lemerle.
At the global level, for all companies combined, the group predicts an increase in insolvencies of 11% this year. A threat that weighs on nearly 1.6 million jobs in Europe and North America. “ Countries like the United States or Germany have experienced continuous declines in bankruptcies but this trend has sharply reversed in the more recent period. », observes Maxime Lemerle. Allianz Trade forecasts a 12% increase in insolvencies for the United States and 4% for Germany.
In France alone, 65,000 failures have already been recorded since the start of the year, according to statistics from the Banque de France. In another note, Allianz forecasts nearly 67,000 failures for 2024.
