Bankruptcies expected to rise in the Netherlands this year

The number of bankruptcies to occur in the Netherlands this year will probably rise, credit insurer Allianz Trade predicts. "No other European country has experienced an increase so quickly," says Johan Geeroms, the risk director for the Benelux region.

"The increase in bankruptcies is a serious warning sign. Last year, we called the 52% increase a catch-up from coronavirus, but an addition of 31% will join them this year," he added. A relatively high number of companies are failing in sectors like hospitality, transport, retail, and especially in the Dutch construction sector.

"After Spain, the urgency in Europe is the highest here," Geeroms said about the situation in the Netherlands. "We expect it to stabilize before 2025, but for all we know, it could be another layer on top. I look at, for example, the recovery in Germany, which really needs to get off the ground. That is very important for our country."

Geeroms says that small and midsized companies have become very vulnerable in recent years. "Costs have risen on the purchasing side, but for competitive reasons, these are not passed on to the customer. This comes at the expense of the profit margin."

He also noted that the amount of bankruptcies in the Netherlands is, on average, higher than in other countries due to the relatively high number of new companies that started after the coronavirus pandemic. "The group of starters is usually good for a certain amount of bankruptcies. They have it particularly hard in the current tough economic climate. They are being tested for the first time. Which is then responsible for the rise in Dutch bankruptcies."

Allianz has researched many countries when it comes to bankruptcies. The expectation is that the current substantial increase in bankruptcies globally will come to an end. After three years of increases, the situation should settle down in 2025. The credit insurer states that the amount of bankruptcies will stabilize at a high level. Worldwide, nine percent more companies are expected to go bankrupt this year than last year.

"The global increase in bankruptcies in 2024 is broad-based. In two out of three countries, bankruptcies will be higher than before the pandemic. The current faltering economy is testing the resilience of companies. Especially companies that have been vulnerable for years," says Geeroms.