France recorded one of the worst fourth quarters in 30 years for business failures, which now go beyond the post-Covid catch-up effect, according to a study by the Altares group published Thursday. With 57,729 procedures opened in 2023, the number of failures is up 35.8% compared to 2022, after already the historic increase of 49% in 2022. For the fourth quarter alone, they are up 37.2% , to 16,820 compared to the same quarter of 2022. “Previously, only the recession period of 1992-1993 had brought France to comparable thresholds for a last quarter,” notes the study.
Many of these failures are “catching up” after the massive support for businesses during Covid, observes Altares, but “the last quarter of 2023 alone further illustrates the current difficulties of economic actors”. “We are now entering a new phase, more structural, more linked to the financial inadequacies of companies which must navigate an extraordinarily tense economic environment,” estimates Thierry Millon, director of studies at Altares.
The study underlines, however, that in the context of “permacrisis”, or permanent crisis, “in which companies have been navigating for four years”, the high failure thresholds “are not a surprise”. “Activity at half mast, inflation level still high, interest rates still high, consumption faltering, form a dangerous cocktail for companies with exhausted cash flow,” says Thierry Millon. He observes that “even the largest players are not spared” since failures affected 171 companies with at least 100 employees in 2023, the highest since 2014 (185 failures).
Very small companies concentrate the majority (92%) of judgments but the acceleration of the difficulties of SMEs is sharply increasing the number of jobs threatened, rising from 143,500 in 2022 to 243,000 in 2023. The construction sector alone concentrates 24% of bankruptcies. Real estate agencies recorded the worst trend (with 116.7% for 910 companies). Agriculture, on the other hand, stands out with an increase in insolvencies contained at 7.1%. They are even decreasing in breeding (-5.1%).
