Following the calming insolvency period surrounding Corona and the subsequent approach to pre-pandemic bankruptcy rates, a significant increase in corporate bankruptcies is expected this year. Construction and trade are particularly affected by the crisis.
The creditor protection association KSV1870 expects an increase of about 15 percent in 2024 compared to 2023, or from about 800 cases to at least 6,200 business bankruptcies. 9,500 private bankruptcies are expected – about 500 more than last year.
More bankruptcies as early as 2023
In the first quarter at the end of March alone, there was an increase in the number of business bankruptcies compared to the same period last year, by more than 27 percent, to 1,691 cases. There were 1,450 bankruptcies in the last quarter of 2023, about 150 more than in the previous quarters of the year before.
According to KSV, the first quarter of 2024 will be the most insolvent quarter since 2009. Due to a number of major bankruptcies – in light of the mega bankruptcies of Signa they only seem quite small – of more than ten million euros each, the provisional debts have increased by 146.2 percent increased to 992 million euros.
In parallel with the increasing number of bankruptcies, the number of affected employees doubled to 8,200, and the number of creditors increased by 37.6 percent to 12,800.
Hoping for a housing package
The KSV1870 projection shows that the construction sector has been in first place since the beginning of the year with 312 insolvent companies (up 17 percent). The sector is urgently hoping for a housing package that the government wants to approve in the National Council this week. The package has a value of approximately two billion euros.
The retail sector comes in second place with a total of 306 bankruptcies (plus 33 percent). The largest corporate bankruptcy so far in terms of debts this year affects Windhager Zentralheiz Technik from Salzburg with debts of 78.2 million euros.
In the first quarter of 2024, 2265 private debt settlement procedures were opened – 25 per day. That was 4.2 percent more than the year before.
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.
