Analyst: Bankruptcies to fall 15 percent this year

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No image availableNL Times

The number of bankruptcies in the Dutch economy is expected to fall by 15 percent over the course of 2015, according to credit insurance firm Atradius. The number is decreasing because of the improving conditions in the economy, but still remains relatively high in construction and non-food retail and even rises in some of the sectors.

In April, there were the fewest bankruptcies since June 2011. Last year, the number of defaults dropped by 19 percent, whereas in 2013 it reached a historical record. Financial prospects of companies have improved due to increased demand for goods and services and falling interest rates. Bankruptcies are expected to drop by 15 percent over 2015 to the level of 6,500. This is still 42% higher than the pre-crisis level.

The number of defaults remains high in construction industry. This is mainly because profit margins still remain low in that sector, and companies adopt projects even below their cost levels. The frequency of bankruptcies was the highest among medium-sized construction firms.

In the non-food retail sector, the number of bankruptcies is high mainly due to the weak results in the clothing sector. Many clothing retailers did not manage to respond to the threat of growing online sales. The bankruptcy of such giants as Mexx illustrates that.

Netherlands are showing a relatively poor result when it comes to bankruptcies compared to the rest of Europe. The number of company closures is higher only in south European countries and Ireland.