The number of business failures in 2023 is approaching the pre-pandemic level, in 2019. This is what the data published this Thursday, August 17 by the Bank of France. In July, there were 42.5% more defaults over the last 12 months than last year. This is explained in particular by the end of the protections and aid granted by the State during the Covid period, while INSEE forecasts GDP growth of only 0.6% over the year.
The Banque de France has counted just under 50,000 business failures this year. This is around 2.5% less than before the Covid-19 pandemic: in 2019, just over 51,000 companies were affected. This year thus marks a very clear recovery in bankruptcy filings compared to the year 2022, which only listed 35,000 defaulting companies.
According to the Banque de France, “defaults fell sharply from the start of the health crisis, following the temporary modification of the dates of characterization and declaration of the state of cessation of payments, then of the public cash support measures to avoid this state of cessation of payments”, she explains in the press release. During the pandemic, there were approximately 38,000 bankruptcies in 2020, and even 28,000 in 2021, historically low figures.
Catering and industry plunge
According to the institution, this year’s recovery reflects “a catch-up movement that concerns all sectors of the economy, albeit in a heterogeneous way”. Certain sectors and certain types of companies are indeed more affected than others.
Only one sector seems to be holding up well: that of agriculture, forestry and fishing, which only increased by 7%. In all the others, the counter is two digits. Transport and warehousing, real estate activities and consulting and business services lost between 31 and 32% more businesses than last year, while the construction sector reached 38 %. The sectors of education and health, financial activities and insurance, information and communication, or even trade and automobile repair revolve around the 45% of additional failures.
The industry, however presented as a priority for the five-year term, lost 53% more companies than the previous year. By far, however, accommodation and catering are the most affected (69%). If this figure seems significant compared to last year, it is also hovering around its 2019 level.
Medium and large companies most affected
The disparities are also felt according to the size of the company. Among microenterprises, the number of bankruptcies remains 6% below its pre-pandemic level, and their rise over one year has not exceeded 40%. VSEs and SMEs – much more affected by the end of aid and by outstanding loans – are suffering much more: between 75 and 95% more than the previous year have gone out of business in the last 12 months . This is significantly more than in 2019.
The most brutal recovery concerns ETIs (intermediate-sized companies) and large groups, which are much less numerous in France. They are 56 to have filed for bankruptcy this year, against 23 the previous year, an increase of 142%.
Faced with these spectacular figures, the Banque de France notes all the same that if the resumption of defaults is brutal, their number “remains well below the average level recorded over the period 2010-2019, before the Covid-19 pandemic”, which was around 60,000 per year. The recovery is therefore rather normal. The banks also openly express their lack of concern: “I do not expect a wave of business failures” assured Daniel Baal, CEO of Crédit Mutuel and Federal Alliance, as the newspaper then reported The gallery. However, there is one concern: the lack of jobs, while certain sectors could suffer from liquidations.