Nearly 150,000 business owners called it quits last year as economy cools off

A massive 147,500 businesses in the Netherlands shut down last year, 8 percent more than in 2022, the Dutch Chamber of Commerce (KVK) reported on Tuesday. The number of bankruptcies increased by 64 percent last year. The Dutch economy is clearly cooling, the KVK said.

Over 276,000 startups opened in the Netherlands last year, 2 percent more than the previous year. In absolute numbers, the number of companies is still increasing. On January 1, the Netherlands counted 2,522,782 businesses, 5 percent more than a year earlier.

“The number of companies continues to increase, but growth is clearly leveling off,” said Joris Knoben, professor of Strategy and Entrepreneurship at the Tilburg School of Economics and Management. “The increase in the number of closures is particularly striking. All in all, these are clear signals of a cooling economy.”

Approximately 3,300 companies went bankrupt last year, an increase of 64 percent compared to the around 2,000 bankruptcies in 2022. The increase was strongest in Retail 9+159 percent), Culture, sports, and recreation (+114 percent) and Hospitality (+101 percent). Retail also had a high number of startups, however.

“The number of bankruptcies is returning to pre-coronavirus levels,” Knoben said. “The need to repay coronavirus support and deferred taxes is killing more and more companies. This growth in bankruptcies, especially in the sectors hit hard by corona, has been expected for some time.”

The healthcare sector had a remarkable increase in closing businesses (+21 percent), while the number of startups decreased by 17 percent. According to Knoben, this is partly due to the sector’s growing attention to the adverse effects of self-employment in healthcare. “The government and industry organizations have made concrete agreements to curb the hiring of self-employed people in healthcare. It would be logical if this resulted in a decrease in the number of startups and a number of self-employed people quitting.”

The hospitality sector also had another challenging year, with 15 percent more businesses closing than in 2022 and a higher-than-average number of bankruptcies. “Companies in the catering industry are having a difficult time. Competition is fierce, not only with other catering companies but also with delivery services and supermarkets. That often makes it difficult to increase prices while costs like rent, salaries, and energy increase. Margins are, therefore, under pressure, and so relatively many companies are dropping out,” Knoben said.