Significant increase in the number of bankruptcies in the Grand Duchy of Luxembourg and its neighbouring countries

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Creditreform analysed the evolution of the number of bankruptcies in Luxembourg during the 1. half of 2023 and compared it to the previous year. Juan Santiago, Authorized Manager of Creditreform Luxembourg S.A., points out: "With an increase of 10 %, to 560 bankruptcies in the 1. half of 2023, the level of companies concerned is still below the result of 2019 before Covid with 628 bankruptcies in Luxembourg". France, Belgium and Germany are witnessing significant growth in bankruptcies. In Germany, there is even an increase of 16.2%.

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13/07/2023 |
  • Creditreform

The number of bankruptcies increased to 560 during the 1. Semester 2023 in the Grand Duchy of Luxembourg. In comparison with the 1. Half of 2022 with 511 bankruptcies, this corresponds to an increase of 10 %.

Companies with a seniority of more than 5 years remain the most affected with 61,5 % of bankruptcies in Luxembourg compared to companies with less than 5 years of seniority with 39%. A significant increase in young companies can therefore be noted, given that the percentage amounted to 21.2 % in 2022.

By analysing bankruptcies by district court, there are 500 bankruptcies (463 in 2022) in Luxembourg, an increase of 8 %. In the judicial district of Diekirch, there is an increase of 29.2 % with 60 procedures (48 in 2022).

Bankruptcies by industry were also analyzed by Creditreform.

The "service" sector remains the sad leader in this analysis with 328 bankruptcies. Despite this significant number, there is a decrease in the number compared to 2022 with 356 bankruptcy proceedings. On the other hand, there is a significant increase in the construction sector, where there is uncertainty. The number of bankruptcies in the construction sector highlights the crisis with an increase of 117 %, to 102 cases in 2023 (47 in 2022). The number of proceedings in the trade sector is on the rise, with 123 bankruptcies in 2023 compared to 105 the previous year. The manufacturing industry experienced 7 bankruptcies in 2023, as long as in 2022 there were 3.

The "HORECA" sector presents itself with a decrease of -15,6 %, or 77 cases in 2022 against 65 in 2023. State aid has supported the sector well. Future developments will show whether the current trend can be sustained. Although it is mainly small companies that filed for bankruptcy in the first half of 2023, it is important to also mention large structures, such as the "Cenaro" group in Luxembourg and "PortoluxConstructions sàrl" in Larochette.

The analysis of the number of bankruptcies in relation to the legal form shows that the sàrl (société à responsabilité limitée - limited liability company) has experienced a significant increase to 418 cases, or 26.6 % compared to 2022 with 331 cases. After a more in-depth analysis of these bankruptcies, we see that this number of 418 bankruptcies consists of 346 sàrl and 72 sàrl-s (société à responsabilité limitée simplifiée -simplified limited liability company). The extraction of figures in relation to the sàrls form of the total number will allow Creditreform to analyze and compare the situation of sàrl-s in the years to come. Regarding the SA (société anonyme - public limited company) form, Creditreform notes a decrease of 31 bankruptcies or -18 % compared to 2022.

Creditreform Luxembourg SA considers that the number of bankruptcies will increase in 2023, in view of energy costs, raw material prices and the rise in interest rates. “We must remember, despite this significant increase in the 1. half of 2023, that we are not at the pre-covid crisis level. In 2019 the number showed 628 cases, a fall of 10.5%.”, notes Juan Santiago.

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