France: business failures up 6.3% in March

Business failures in France accumulated over the last 12 months increased by 6.3% in March, according to provisional figures reported by the Banque de France on Wednesday April 13. But “there is no wave of bankruptcies to come at this stage”, estimates the central bank, which stresses that the increase must be interpreted with caution. Indeed, during the reference period from April 2020 to March 2021, the number of insolvencies was very low due to the pandemic, which led to the temporary closure of commercial courts, and cash support measures for businesses .

The resumption of defaults is nevertheless accelerating, the increase for February being only 2.9%, according to final figures published by the Banque de France. At just under 30,000 over 12 months in March, their number is still 36.6% lower than that recorded two years earlier.

Business insolvencies in France cumulated over the last 12 months increased by 6.3% in March, according to provisional figures from the Banque de France, April 13, 2022. (BANQUE DE FRANCE)

It is in the transport and warehousing sector that the increase in the number of defaults is the fastest, at 17.6%. This sector was marked by a very large number of business creations during the pandemic in delivery services. Construction follows with a 16.7% rise in failures, ahead of information and communication with 11.6%. Conversely, declarations of insolvency continued to fall for accommodation and catering (-8.8%).

By size of company, it is the very small (TPE), with less than 11 employees, which are experiencing a marked recovery in insolvencies, up 23.7% over one year, while large SMEs with 50 to 249 employees experienced a drop in defaults of the same order of magnitude (-23.4%). And only 23 bankruptcies of medium-sized companies (ETI) and large groups were notified, a drop of 55.8%.

Altares, for its part, published a study showing a 34.6% increase in business failures over one year in the first quarter, with a different methodology, which notably takes into account the safeguard procedures excluded by the Banque de France, which only takes into account situations of cessation of payment, i.e. liquidations and legal proceedings.

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