Corporate insolvencies in France: 2018 report and outlook for 2019
The number of corporate insolvencies has increased since May 2018. Coface expects this trend to continue in 2019 (+1%), in a context of growth hampered both by a less favourable international environment (less dynamic growth in the rest of the world, greater protectionism), and by ongoing supply constraints (capacity utilisation rates and recruitment difficulties are at their highest since 2007). While the scale of this rise in the number of insolvency procedures is modest and nowhere near enough to cancel out the improvements observed between the start of 2017 and May 2018 (-11%), it is likely to affect a diverse and varied range of businesses. The sectors with the most insolvencies effectively saw their situation deteriorate in the second half of 2018. Apart from construction, the sectors reliant on consumption were also affected in the second half of the year, as were the automotive and personal services sectors, against a background of lower household confidence. Although the largest companies also experienced a rebound in insolvencies in the second half of the year, most of this increase is attributable to the difficulties experienced by micro-enterprises with revenue below EUR 250,000 and representing over 80% of bankruptcies. As a result, the average cost of insolvencies has continued to fall. Meanwhile, while eleven out of thirteen regions recorded fewer insolvencies in 2018, insolvencies in the Ile-de-France region rose sharply.
2018, a year of contrasts
52,665 corporate insolvencies were recorded for the whole of 2018, i.e. 2.9% fewer than in 2017. Accordingly, insolvencies were at their lowest level last year since 2008. However, from May onwards, the trend points to a rebound in insolvencies, when 52,073 insolvencies were recorded for the previous 12 months (Chart 1).
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