Corporate insolvencies down 33.5% in October

State aid and the freezing of certain regulatory procedures explain this result.

Construction shows its dynamism despite the crisis.

Business bankruptcies are still fewer despite the crisis. In October, according to published by the Banque de France on Tuesday, the number of business failures showed a decline of 33.5% over one year. “This decrease does not indicate a reduction in the number of companies in difficulty but both the impact of the confinement period on the operation of the commercial courts and the regulatory developments which temporarily modified the dates of characterization and declaration of the state of cessation of payments», wishes to specify the institution.

Indeed, due to the health crisis, many regulatory procedures have been put on hold, such as the declaration of the state of cessation of payments or Urssaf proceedings. These freezes were coupled with numerous direct state aids (partial unemployment, state-guaranteed loans, solidarity funds, etc.). So many measures that have allowed companies to keep, for some artificially, their heads above water.

Thus, the number of failures recorded over the last three months is almost 40% lower than that observed over the same period in 2018 and 2019, notes the Banque de France. And this decline is observedin all sectors and for most business categories“.

Ever more business start-ups

The fall in the number of insolvencies should be compared with the creation of businesses which, , are in “sharp increase»: +19% over the last three months (September to November) compared to the same months of 2019 and +4.5% over the last twelve months. These business creations are driven by the construction, information and communication activities, but also transport and warehousing sectors. Over the last three months, this last sector, boosted by the crisis, recorded 14,100 business creations. “Within this sector, it is in the other postal and courier activities that the increase is the most significant (+14,700 creations over the last three months). This growth reflects in particular the development of home delivery services“, emphasizes INSEE.

In this context, the number of bankruptcies should be lower this year than in 2019. But this picture should logically darken next year, according to forecasts from the National Council of Commercial Court Clerks (CNGTC). The latter expects cascading bankruptcies when the support measures for businesses stop.

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