Possible consequences of dropping corona support visible
ROTTERDAM, June 10, 2022 - After a decline in April, considerably more companies went bankrupt in the Netherlands in May. This is evident from the latest figures from business data specialist Altares Dun & Bradstreet. In May, 191 companies went bankrupt, 85 more than in the previous month (106).
The number is also a lot more than in May 2021. Then 150 ceased to exist. May's increase possibly breaks a trend of declining numbers. Only in November 2021 were there more bankruptcies (206) than last month. The upward trend could be a precursor to more months with higher figures. Companies will have to deal with various (phasing out) government measures and, moreover, cannot rely on their financial buffers indefinitely.
Most bankruptcies in trade, construction
As always, most bankruptcies fell in the trade and construction sectors. In May, 37 trading companies (think retailers and wholesalers) went bankrupt, following 26 bankruptcies in April. This is the highest number in that sector since January 2021. In all of 2021, this industry experienced nearly 300 bankruptcies - more than any other sector.
Construction was also hit. There, 33 companies went bankrupt, after 21 in April. Adjusted for the size of the sectors, most companies went bankrupt in other sectors: in transport and storage and in manufacturing almost 0.03 percent of the companies went bankrupt. In construction (0.02%) and trade (0.015%) this was considerably less. Spread across all industries, less than 0.01 percent of firms went bankrupt.
Outlier in the industry
19 companies in the industry went under, and that is the highest number since at least January 2017, when Altares Dun & Bradstreet began keeping track of these statistics. One possible reason for the bankruptcies is the rise in raw material prices and thus the pressure on production capacity that manufacturers are feeling. The uncertainty of the entire logistics chain, due to inflation, the war in Ukraine and lockdowns in China, seems to be influencing this.
Joris Peeters, Chief Data Scientist at Altares Dun & Bradstreet: "Last month we cautiously said that the low April numbers felt like silence before the storm. So the increase comes as no surprise, but we are still a long way from pre-corona levels. This fall, companies will start repaying tax debts. That, as well as declining reserves, will boost the number of bankruptcies, we expect."