Bankruptcies fell in January for the first time since August

The number of bankruptcies fell again in January after four consecutive months of increases, according to Statistics Netherlands (CBS). The number of bankruptcies remained low compared to the period before the coronavirus pandemic.

CBS said that 35 fewer companies were declared bankrupt in January 2023 than in December 2022. That reflects a decrease of 13 percent. After August 2022, bankruptcies rose for four straight months to the highest level since May 2020. Even still, the total remained relatively low.

Companies that were not fundamentally sound managed to survive in part due to the Cabinet’s financial response to the coronavirus pandemic. This kept bankruptcies fairly limited.

Businesses now are not mainly facing the consequences of the coronavirus, but instead are dealing with the sharp increase in energy prices and overall higher levels of inflation. The Cabinet has also put measures in place to provide support for this.

The large banks recently pointed out that few of their customers have run into problems, partly due to government support. Despite the high inflation, they have not yet noticed a large influx of companies referred to special departments at the bank to manage problematic financial issues with their clients.

Since 1981, the highest number of bankruptcies in the Netherlands hit a peak of 911 in May 2013. After that, the number of bankruptcies decreased steadily until August 2017. Subsequently, the trend remained fairly flat until mid-2020. Since then, the number of bankruptcies fell further to a record low of 133 in August 2021.

As in the previous months, the trade sector saw 48 declared bankruptcies in January, more than any other group. That total was the same as in December. Construction followed with 34. Both sectors are among the largest industries in the country.

The transport and storage sector had the highest bankruptcy rate of any sector. There were 27 bankruptcies in that sector last month, and 19 the month prior.