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Business insolvencies up sharply in 2023, but still below pre-Covid level

In 2023, the number of business failures increased to reach 55,492 at the end of December, the Bank of France indicated this Friday.

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Business insolvencies up sharply in 2023, but still below pre-Covid level

In 2023, the number of business failures increased to reach 55,492 at the end of December, the Bank of France indicated this Friday. There were 41,297 over the previous twelve months, an increase of 34.4%. “This level reflects a catching-up movement which concerns all sectors of the economy but in a heterogeneous manner,” commented the Bank of France in a press release.

Compared to 2022, insolvencies increased by 44.6% in accommodation and catering, by 44.4% in information and communication, by 40.4% in real estate activities and by 38.7% in construction. On the other hand, they fell by 1.3% in agriculture, forestry and fishing. By company size, VSE-SME insolvencies jumped 34.3% over one year, to 55,435. Insolvencies of mid-sized and large companies increased by 111.1% but over a much more limited number, 57 over twelve months.

Also read “A catch-up movement”: the number of business failures continues to grow

In total, however, the number of defaults remains “significantly lower than the average level recorded” before the Covid-19 pandemic, observes the monetary institution. Over the period 2010-2019, the average annual failures peaked at 59,342. Among the reasons given by the Banque de France to explain this decline are “the temporary modification of the dates for characterizing and declaring the state of cessation of payments” and the “public cash support measures making it possible to avoid this state cessation of payments. In total, the number of failures over one year nevertheless still remains “significantly lower” than the average level of 59,342 recorded over the period 2010-2019, notes the Banque de France.

“The number of failures remains below the pre-Covid average,” business mediator Pierre Pelouzet also rejoiced this Friday on the set of BFM Business, judging it to be at a “reasonable” level. According to him, a few sectors should nevertheless be monitored, notably that of construction, which is in difficulty due to the rise in interest rates.

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