The gradual disconnection of state aid since autumn 2021 and the outbreak of war in Ukraine have considerably clouded the economic outlook for a large number of companies. In Europe, most economists have downgraded their growth figures for 2022 in the major eurozone countries. Rising energy, commodity and food prices pushed the consumer price index to levels not seen in decades. The European Central Bank is due to tighten monetary policy in a few weeks by raising rates following ending its emergency asset purchase program (PEPP, for Pandemic Emergency Purchase Programme). As the war in Ukraine continues, more and more economists are raising the specter of a recession in the coming months.
In this particularly gloomy context, the number of bankruptcies jumped 49% in the second quarter following a previous rise of 35% in the first quarter of 2022. According to the latest report unveiled by the firm Altares on Monday July 11, the number of failures thus fell from 6,587 in the second quarter of 2021 to 9,826 in the second quarter of 2022. For comparison, the total of bankruptcies recorded in 2018 and 2029 was around 12,000 over the same period. The gap is narrowing with the pre-Covid level without returning to the levels of 2018 and 2019 over the same period. In total, the number of jobs at risk stands at 30,560, compared to 19,530 in the second quarter of 2021, an increase of 56%.
At that time, companies were still on the receiving end of numerous “whatever the cost” aids (solidarity funds, short-time working).
« Our corporate fabric resists but the curves we observe should prepare us to record between 35,000 and 40,000 defaults at the end of the year. Because the specter of recession level and companies will not be able to continue to dig eternally into their cash while waiting for the recovery of household consumption”, emphasizes Thierry Millon, director of studies at Altares.
SMEs and start-ups pay a heavy price
In detail, small and medium-sized enterprises (SMEs) appear on the front line with a spectacular increase of 74% between the second quarter of 2021 and the second quarter of 2022 with 731 cessations of activity, once morest 420 a year earlier. The number of SME bankruptcies has thus returned to its pre-crisis level.
As for very small businesses (TPE with less than three employees), the increase, admittedly less significant, marks a clear acceleration (47%), rising from 5,012 to 7,365 at one-year intervals over the same period.
Among the other striking results of this study is the proportion of young businesses (the vast majority of which are micro-businesses) that have gone out of business. Thus, companies less than 3 years old, that is to say those which have been registered for the most part since the start of the pandemic, recorded the largest increase in bankruptcies (+ 135%), rising from 743 to 1,750. . « Certainly, we create more companies, but we lose more, emphasize the Altares experts. The number of bankruptcies for these start-ups rose from 743 to 1,750 between the second quarter of 2021 and the second quarter of 2022. By way of comparison, companies between three and five years old (+53.8%), those with between 6 and 10 years old (33.2%), or finally those between 11 and 15 years old (+32.9%) recorded much less marked increases
Finally, catering (+110%), retail trade (+73%) and personal services (91%) are among the most affected sectors. In construction (+24%), manufacturing industry (+36%) or business services (+41%), there is a catch-up phenomenon.
Business creations are running out of steam (-10% in the 1st half)
The war in Ukraine and the economic slowdown in the first half of the year undoubtedly put the brakes on a large number of business projects. After setting records over the past two years, the number of companies registered in commercial courts is running out of steam.
According to the latest barometer of commercial court clerks unveiled on Monday July 11, 303,870 companies were registered during the first half of the year, a decrease of 10% compared to the same period in 2022 (324,829). “The slowdown is even more marked for sole proprietorships, including micro-enterprises, which see their number of registrations drop by 28% over the half-year, compared to the same period last year”, emphasizes the institution.
Signs “harbingers of a deep economic crisis”
At the same time, more than 185,000 companies have been deregistered, an increase of 35% over the same period compared to 2021 (131,412) according to the clerks. With the slowdown in growth forecast for the whole of 2022, many sectors might pay a heavy price in the months to come.
« If the time is not yet to run wild, the inversion of the curves of the creation of companies and failures, associated with an acceleration of liquidations and delistings of companies, might be the harbingers of a deep economic crisis. », explained Thomas Denfer, president of the National Council of Commercial Court Clerks in a press release.
