While the number of corporate insolvencies fell by 29.4 percent in the first three quarters of 2021 and thus continued to decline, there is now a trend reversal: If you look at the third quarter alone, the number of proceedings opened has increased by almost 30 percent. The reason for this should be the expiry of the deferrals by health insurance and finance, says the creditors’ protection association Creditreform. 2,500 companies could go bankrupt without support.
Creditreform counted 1,840 corporate insolvencies in the first three quarters, 766 fewer than in the same period in 2020. The number of insolvencies opened fell by a fifth to 1,234. In the first half of the year, however, the decline in openings was still 36.5 percent.
“Due to the extended relief measures, company insolvencies have fallen from one historic low to the next,” explained Gerhard Weinhofer, managing director of the Austrian Creditreform Association. “Now it is clear that Austria’s economy has recovered very quickly after the sharp slump at the beginning of the corona pandemic, especially in the third quarter. With the reinstatement of the obligation to file for insolvency and the termination of deferrals, one is returning to normal – and that is what leads to it again to more bankruptcies than in the months before. “
As soon as the corona support ends, the bankruptcies would slowly but steadily rise again to the level of around 5,000 proceedings per year that has been common in recent years, say the creditors’ advocates. In an analysis for Creditreform, Walter Schwaiger from the Vienna University of Technology calculated that around 2,500 companies would currently be at risk of insolvency if the support were ended.
Because of the lack of major insolvencies so far, both the insolvency liabilities (approx. 440 million euros) and the jobs affected (approx. 4,200) are falling sharply, writes Creditreform.
“Consumer pleasure strongly inhibited by Corona”
Vorarlberg (-50.0 percent), Salzburg (-48.3 percent) and Carinthia (-46.9 percent) recorded the greatest decline in company bankruptcies. The highest levels of insolvency were in the federal capital with over nine bankruptcies per 1,000 companies, the lowest in Vorarlberg with almost 2 out of 1,000 companies. Across Austria, 5 out of 1,000 companies had to go to the bankruptcy court.
Insolvencies in tourism (“accommodation and restaurants”) fell the most with a minus of over 40 percent, followed by industry with minus 38.1 percent and “credit and insurance” with minus 28.4 percent. The greatest relative insolvency impact was in construction with 16 and in transport with 15 out of 1,000 companies.
Personal bankruptcies were at their lowest level in 15 years. According to Creditreform, the total number of personal bankruptcies fell by 13 percent to 5,174 proceedings. The number of debt settlement procedures opened has fallen by almost 11 percent to 4,860 cases. “The consumer pleasure of Austrians was strongly inhibited due to the lockdowns, the short-time working and the general concern about the job. This led to an increase in the savings rate,” said Weinhofer. (apa)
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