Corporate Bankruptcies in Austria: a 10.6 Percent Increase in 2023

November 9, 2023 – According to Creditreform, there were 4,016 corporate bankruptcies in the first three quarters. Despite the 10 percent increase, there is no reason to be alarmed, especially since the value is at a comparatively low level. In the credit and insurance sector went

According to final data, a total of 4,016 company insolvencies were counted across Austria in the first three quarters of 2023 – 10.6 percent more than in the comparable period of 2022.

That’s what he reports Austrian Association Creditreform and adds that the pre-pandemic level has already been exceeded.

The number of insolvencies opened rose by 14.5 percent to 2,467, and the number of insolvencies rejected due to lack of assets rose by 4.9 percent to 1,549 proceedings.

Slight decline in credit and insurance

The statistics show the highest insolvency rate, defined as the number of insolvencies per 1,000 companies, among the seven separately reported sectors for the “transport and communications” sector (28.5), followed by construction (26.2).

The “credit and insurance sector” – this group also includes insurance brokers – is in third place with a ratio of 15.2.

In absolute terms, there were the fewest bankruptcies in the credit and insurance sectors (85). Along with transport and communications, it is the only sector with a slight decline (-1.2 percent).

Multiple causes of increase

“The increase in the price of materials and energy, high wage agreements with simultaneously falling margins, the end of cheap financing and a generally uncertain market environment are leading to increasing insolvencies,” Creditreform managing director Gerhard Weinhofer.

Creditreform identifies the main causes of company insolvencies as a deteriorating general economic situation, management errors and a lack of capital. Inflation meets declining demand and falling margins. More restrictive legal regulations also played a role.

For the whole of 2023, Weinhofer continues to expect around 5,500 company insolvencies, a figure that is as low as it was in 2019 or 2002. Creditreform therefore sees “no reason (yet) to sound the alarm”, although the trend will continue in 2024 . It is forecast that the 6,000 bankruptcies mark will be reached next year.