Business insolvencies at nine-year high in first quarter, says Altares

The number of business failures reached a nine-year high in the first quarter, with 17,088 procedures opened, according to a study by the Altares group, but the increase is slowing down a little over one year. Thus, 17,088 procedures were opened in the first quarter, the highest since the first quarter of 2015 (18,134), and the symbolic bar of 60,000 defaults over twelve months was crossed in February.

Among these failures are those of 154 SMEs with more than 50 employees, which is the highest since the 1st quarter of 2013 (156). The number of openings “soars by 58%” among SMEs with 50 to 200 employees, Altares worries, threatening 59,000 jobs. The study shows that activities linked to real estate are still in great difficulty, even on a smaller scale than those linked to household equipment.

Île-de-France, with some 4,000 defaults, recorded its worst first quarter in 20 years (30% defaults). On the other hand, observes Altares, the increase in the number of defaults over one year in the first quarter, although high at 19.4%, is the lowest in two years: they had increased by 43.6% in 2023 and by 34, 6% in 2022. The study also notes that “very young companies are more resilient”, with the number of failures increasing by only 5.9%.

Several activities are also returning to the green, such as personal services, catering and food retail activities. Certain regions such as Hauts-de-France (6% failures) or Nouvelle Aquitaine (10%) seem a little more spared than others. “With more than 17,000 defects, over the first three months of 2024, the average of the pre-Covid decade for a first quarter (16,700) is exceeded,” notes Thierry Millon, director of studies at Altares.

He observes that “more than 1,400 (defaults) concern SMEs, one in ten of which employ more than 50 employees”: “SMEs weakened by a debt that is now too heavy in an economic situation that is too weak,” he estimates. However, he notes “that like inflation, the rate of insolvencies also seems to want to slow down at the start of spring”. “Thanks to an economic situation which would gradually become a little more accommodating, the year 2024 would end with a number of failures, including safeguards, increasing by 10%, close to 64,000 procedures,” concludes Thierry Millon, estimating that it would then be “a high number but not a wall of bankruptcies”.