Number of bankruptcies remained at historically low level in May

The number of companies that declared bankruptcy increased slightly in May, but remained at historically low levels, Statistic Netherlands (CBS) said. ING has also revealed a more optimistic forecast about the potential for an upcoming bankruptcy wave caused by the coronavirus crisis, Nu.nl reported.

Last month, 130 Dutch companies went bankrupt. That was 5 more than in April, about half as much as in May 2019 and 2020. Since June last year, the number of bankruptcies has been steadily decreasing due to the economic support packages promoted by the government.

For a long time, it was expected that the number of bankruptcies would increase at the end of this year with the support packages being phased out. ING economists still believe that the number of bankruptcies will increase in the future, but have now adjusted their forecast about the severity of the crisis.

The number of bankruptcies during the ongoing pandemic has been considerably lower compared to the 2008 financial crisis, ING said.

In addition to the broad support from the government, the ING cited two more reasons for the revised forecast. Companies have reduced their workforce faster than during the financial crisis. Simultaneously, the sectors hardest hit by the crisis generally have fewer companies in total.

In February the number of bankruptcies reached its lowest level since December 1990.