the Banque de France sees it as a simple “normalization” after the pandemic

2023-10-06 18:31:00

Would “whatever it takes” have only postponed inevitable bankruptcies? While business failures have been on a continuous rise for almost two years, the Banque de France (BdF) only sees “ a normalization » following their decrease during the pandemic due to “ whatever it costs “. At the same time, the Banque de France is pleased with the number of business creations “ historical ».

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In a document titled “ What is the economic impact of business failures? », the BdF notes on Friday that the total number of failures over 12 months at the end of July 2023 remains 16% lower than the average for the decade 2010-2019, and underlines that there have been 26 times more business creations so many failures in 2022.

+41.5% compared to August 2022

However, the number of companies placed in liquidation or receivership is increasing significantly. Over the twelve months between August 2022 and 2023, 50,441 companies were affected, according to figures published by the Banque de France this Wednesday, September 13. An increase of +41.5% compared to August 2022.

Indeed, failures exceed their 2019 level by 61.9% for very small businesses (VSE, less than 10 employees), by 79.1% for small businesses (10 to 49 employees), by 55% for medium-sized companies (50 to 249 employees) and 92.6% for mid-sized companies (ETI) and large groups. In this last category, 52 companies have gone bankrupt over the last twelve months, compared to 27 in 2019. A strong trend which does not particularly concern the Banque de France.

This increase in bankruptcies constitutes a “ catching up » according to the BdF following the period of the health crisis when recovery and liquidations had been limited by the abundance of public aid paid to businesses. Facing the press, Emilie Quema, director of businesses at the BdF, was reassuring: “ the rise in the number of failures is all the greater than the drop ” had ” been strong in 2020 “. Emilie Quema also recalls that failing companies in 2022 had already suffered in 2020 “ a much greater shock of activity ” to others.

Mid-sized companies in arrears

They had seen their activity decline by almost 20% in 2020, compared to around 6% for the others. Companies that were supported during Covid by a PGE (state-guaranteed loan), then defaulted, experienced a drop of around 24% in their turnover in 2020, compared to 9% for the others.

The head of the BdF also declared that “ PGE reimbursement problems are very occasional », since of the 143 billion lent, 46% had been repaid at the end of June, or 65.8 billion euros. The BdF expects “ a tray » failures, « a little below the pre-pandemic average », According to Guillaume Richet-Bourbousse, head of the BdF business observatory.

Emilie Quema, however, noted a “ alert point » on mid-sized companies (mid-sized companies – up to 5,000 employees) where the increase in insolvencies is greater: +67.7% compared to the 2010-2019 average, over the 12 months ending in July. Given their size, more jobs are at risk ”, she noted. But at this stage the BdF considers the number of jobs threatened to be 1% of total employment.

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For the moment, the BdF excludes a future “ dark scenario » economic by the voice of Emilie Quema, and assures not to be satisfied “ to study statistics » failures, but to fulfill a role “ accompanying ” companies.

(With AFP)