The increase in company insolvencies continues in January, the most exposed SMEs

In France, the rise in business insolvencies in January continues with a virtual doubling in one year for VSEs and small SMEs, the Banque de France reported on Wednesday.

Compared to January 2022, liquidations and receiverships increased by 51.6%, reaching 42,640 in the last 12 months. This figure is still 16.6% lower than the number of contests registered during 2019, before the health crisis.

In 2020 and 2021, thanks to the support measures for companies in the face of the economic slowdown and the cessation of certain activities during the Covid-19 crisis, the number of company bankruptcies has been considerably reduced.

Last month, insolvencies nearly doubled in one year for both very small businesses (TPEs) with less than ten employees (+94.8%), and small businesses with a workforce between 10 and 49 people (+ 97.2%). For medium-sized companies with between 50 and 249 employees, the increase is 82.2%. For micro-enterprises (self-entrepreneurs), the increase was contained at 49.1%.

108% increase in the hotel and restaurant industry

At the other end of the scale, the rebound is limited to 24% for medium-sized companies (ETI) and large groups, that is, 31 bankruptcies registered last month compared to January 25, 2022.

The increase in judicial settlements and reorganizations affects all sectors of the economy, but it is the strongest, with an increase of 108% in one year, in the hotel and restaurant industry. This sector had been greatly affected by the consequences of the pandemic and, therefore, had particularly benefited from government aid.

But the increase is also very strong in industry, with almost 70% more breakdowns compared to January 2022, as well as in trade and automotive repair (+55.5%).

Agriculture and real estate activities are the two sectors least affected by the rise in insolvencies, with increases limited to 9.6% and 11.8% respectively. The expert firm Altares predicted last month that corporate insolvencies in 2023 would surpass their 2019 level, making that year the best since the 2008 financial crisis.