In the first three months of this year, 317 companies were declared bankrupt and 31 were liquidated. This emerges from figures from the Statec statistics office, which were published on Tuesday.
The number of bankruptcies rose by 15 percent compared to the first quarter of 2023, with 317 companies compared to 276 in the previous year. Initial estimates suggest 1,239 jobs were lost to bankruptcies, compared to 768 in the first quarter of 2023, an increase of more than 60 percent. The last time a similar level of job losses occurred in a single quarter was in 2011.
Construction is struggling
The construction industry has been the sector most affected by bankruptcies since 2023, both in absolute numbers (71 bankruptcies, 18 percent more than in the first quarter of 2023) and in terms of white-collar job losses. These are estimated at around 660, 244 percent more than in the first quarter of 2023. The construction sector therefore accounts for more than half of the total loss of employed jobs due to insolvencies.
The commercial sector recorded 47 bankruptcies in the first three months of this year. Although this number has decreased compared to the first quarter of 2023 (47 compared to 55), the losses in employed jobs have more than tripled (133 compared to 44).
Construction boom in the soil
Since the ECB raised interest rates in July 2022 to combat inflation, construction activity has stalled. The number of building applications fell dramatically and the sector has been in crisis ever since. According to the statistics office, just over 1,000 single-family homes were approved for construction last year, a decrease of 28 percent compared to 2019, i.e. 400 fewer single-family homes. For buildings with two residential units or more, around 3,200 units were approved for 2023, a decrease of 18 percent or 700 apartments compared to 2019.
As a result, in 2023 the number of job seekers from the construction industry rose by 33.8 percent to almost 1,800 at the turn of 2024. Of the job seekers from the sector, around 40 percent are from the areas of shell construction (gross oeuvre) and finishing (second oeuvre). In the last category, the proportion of unemployed people rose by almost 45 percent within a year. At the same time, companies are also hiring fewer people.
At the beginning of the year, the government council classified the construction sector as “in crisis”. This enables companies, among other things, to request short-time work more easily. The ministers explained that such short-time work was only intended for work on construction sites. The measure is limited to 20 percent of the workforce and to areas of activity such as earthworks, demolition and building construction. Civil engineering was not taken up. Just over 2,700 employees were laid off as a result of bankruptcies in 2023, with more than two out of five of the jobs lost in the construction industry.
In the catering sector there were 32 bankruptcies, eleven percent fewer than in the first quarter of 2023, with around 194 jobs lost for dependent employees, according to initial preliminary data, an increase of 46 percent.
The number of company liquidations, however, fell sharply in the first quarter of 2024 and fell to a tenth compared to the first quarter of 2023 (21 instead of the previous more than 200). This comes as the number of liquidations of holding companies and investment funds has plummeted, whereas they previously accounted for the majority of liquidations.
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2024-04-17 17:32:50