Corporate insolvencies expected to top pre-Covid levels this year
The enchanted parenthesis of Covid-19, in terms of business claims, is indeed closing. After the Bank of France, it’s Altares’ turn to confirm it. In 2022, failures exploded by almost 50% over one year, according to the report of this research firm, to reach a total of 42,514 open files. A boom willingly described as “historic”, because “never observed before”. It should be qualified all the same: in 2021, the number of insolvency proceedings had remained abnormally low, under the effect of massive public aid “whatever the cost”.
Compared to 2019, the last year before Covid, liquidations, receiverships and safeguards remain in sharp decline (-18%). Same observation on the number of jobs at risk: at 143,500, it is up 52% over one year… but down 17%, compared to before the coronavirus.
Towards an accelerated return to normal insolvency proceedings in 2023
Nevertheless, the 2022 rebound took Thierry Millon by surprise, especially since the catch-up seems to have accelerated in the fourth quarter. “The pace is more sustained than expected, worries the director of studies at Altares, which raises fears of a return to pre-crisis values. [sanitaire] earlier than expected.” According to its first estimate, 2023 could thus exceed pre-crisis levels, with more than 55,000 failures expected (as in 2017).
“A number, certainly large, but rather reasonable, given the very difficult context that we are going through”, tries to put Thierry Millon into perspective. Reference to “financial constraints (repayment of Covid debts and in particular state-guaranteed loans, inflation, rising interest rates, energy bills, etc.)” which weigh, unsurprisingly, on companies. But also, and this is more surprising, to the difficulties of supply (supply, recruitment) which plunge some into the “inability [d’] honor order books that are nevertheless well filled”.
Small SMEs and services to individuals in great difficulty
These tensions have already been felt in the 2022 balance sheet of defaults. Altares is concerned, in particular, for small SMEs (10 to 99 employees) and young companies, “in a situation of extreme vulnerability”. The former thus experienced a soaring loss ratio of 78% over one year (i.e. more than 3,200 structures affected) – and even +93% in the last quarter, a period marked by “the strongest deterioration recorded since 2014” for this category of companies.
In detail, B to C activities appear on the front line, such as restaurants, grocery stores and bakeries, where the number of applications has more than doubled in one year in each of these sectors. Industry (+68%) and trade (+56%) are also on a bad streak, where construction (+34%), business services (+32%) and accommodation (+23% ) resist better.
Similarly, some regions are doing less badly. This is the case for Île-de-France (+35%) and the South Region (+38%). On the other hand, and as in 2021, Hauts-de-France is the weak linkwith a surge in insolvencies of +77% (after already +23% the previous year), followed by Occitania (+68%).