Business failures continue to rise. The latest study by the firm Altares counted 14,317 in the first quarter of 2023, i.e. a jump of 43.6% compared to the first quarter of 2022. Already last year, the trend was on the rise after a year 2021 marked by a level historically low explained by state aid to companies affected by the health crisis. Once the storm passed, aid dried up and insolvencies now exceed their pre-crisis level, reaching that of the first quarter of 2018. “These data are the result of a difficult economic environment marked by a contraction in consumption, but also by the reimbursement of Covid debts”, underlines Thierry Millon, director of studies at Altares.
Businesses are now repaying state-guaranteed loans (PGEs) taken out during the pandemic. However, the difficulties have been linked since 2020, between shortages of raw materials, inflation and energy crisis, and companies have not been able to regain a sufficient level of income to wipe their slates clean. “We feel like we are in constant crisis. And when you have a turnover that is stagnant and expenses that increase, the scissor effect is difficult to sustain,” continues Thierry Millon.
If the number of failures does not reach known records between 2009 and 2015, “it is because the forced recoveries of Urssaf have only recently resumed”, recalls the expert. “After a period of deferred payment of contributions, which kept debtor companies standing in the same way as companies up to date in their contributions, it is time to resume the path of competitive play and therefore of the forced collection necessary for the Urssaf to carry out their mission.” A path that will lead to a further increase in defaults in the next quarter, “because between PGE and social debt, the slate is starting to be heavy to bear,” he warns.
According to Altares, while VSEs are still the most represented among companies defaulting, it is the jump of 59% in defaults among SMEs and ETIs that is worrying. “These 1125 defects do not only affect the employer and its employees, but an entire ecosystem made up of suppliers, subcontractors…”, warns Thierry Millon. A prospect that inflates the level of jobs at risk, all the more worrying as it concerns companies established in the territories.
In detail, construction is still resisting compared to clothing, food, real estate agencies, catering or home help; but the prospect of a deterioration in the sector raises fears of an even sharper rise in insolvencies.
“There will be no wall of bankruptcies, but vigilance and anticipation are in order. Between forced recoveries, breakdown of consumption and real estate in difficulty, ending 2023 with 55,000 defaults as expected would be a good thing, because the prospects could be much worse”, concludes Thierry Millon.
