In the first half of the year, the number of business insolvencies in Austria increased significantly again. With 1548 bankruptcies, there was an increase of 12.09 percent compared to the same period last year, which is about the same as in the pre-Corona year 2019 (1534). The number of employees affected by insolvency has soared, rising 87.64 percent to 9,095, the Alpine Association of Creditors (AKV) announced on Wednesday. The major bankruptcy to date was that of furniture dealer Kika/Leiner.
“It is becoming increasingly clear that 2023 will be a bankruptcy year with a lot of jobs at risk,” the AKV writes. This year, 9095 jobs were already threatened with insolvency, compared to 4847 in the first half of 2022. Even in the pre-pandemic year of 2019, there were significantly fewer affected jobs with 6814.
More than 3000 Kika/Leiner employees affected
About 3,300 of the more than 9,000 jobs are due to the bankruptcy of Kika/Leiner in early June. This puts the furniture retailer in the top 10 of the largest bankruptcies since the 1980s. Even after debts, the bankruptcy of Kika/Leiner was the largest insolvency of the year so far with 132 million euros.
It is followed by Gazprom Austria, where claims of about 118 million euros have been registered. However, according to the AKV, the majority of the claims are still disputed. Overall, liabilities from all newly opened corporate insolvencies rose to EUR 1.2 billion in the first half of the year, up from EUR 1.067 billion in the same period last year.
In terms of sectors, most business failures occurred in construction (408) and trade (384). According to the creditor protectors, the two sectors are most affected by “new causes of insolvency”, such as high inflation, higher credit rates and higher material and production costs.
AKV expects a further increase in the number of bankruptcies
The AKV expects a further increase in the number of corporate bankruptcies in the course of the year: “The gloomy economic situation does not mean that the number of corporate bankruptcies will ease in the coming six months. The AKV therefore expects approximately 5,500 corporate bankruptcies throughout 2023.” .
The number of private bankruptcies has also increased by 4547 and an increase of 5.18 percent compared to the first half of 2022. Despite the easing of debt relief, the value is well below the level of 2019 (5066). 175 private bankruptcies were filed per week. The average debt amounted to 138,400 euros, compared to 111,700 euros in the same period last year.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
