Dutch bankruptcies still on the rise; Upward trend for over two years

The number of bankruptcies rose again in July. According to Statistics Netherlands (CBS), 24 more companies were declared bankrupt last month than in June, an increase of 6 percent. CBS says the trend in the number of bankruptcies has been rising for more than two years.

In the first seven months of 2024, approximately 43 percent more companies went bankrupt than in the same period a year earlier. The number of bankruptcies was also higher than in the three years before the coronavirus pandemic.

In July, 453 companies and institutions, including sole proprietorships, were declared bankrupt. Of all sectors, trade had the largest number of bankruptcies at 108. That is 60 more than a month earlier. Trade is one of the sectors with the most companies. Relatively speaking, the most bankruptcies were pronounced in the hospitality sector in July.

The large increase in the number of bankruptcies in trade was partly due to the fact that July had one more court hearing day than June. Many courts make bankruptcy rulings on a fixed day of the week. One month, therefore, may have more of these sittings than another. The number of bankruptcies in the trade sector was also relatively low in June. In addition, according to CBS, one of the bankrupt companies had relatively many branches, each of which counted for a bankruptcy.

Experts have been warning for some time that the number of bankruptcies would continue to rise this year. Johan Geeroms, risk director of the Benelux branch of credit insurer Allianz Trade, called the current economic climate “treacherous” earlier this month. Entrepreneurs should be warned, he said. The costs for entrepreneurs have risen considerably in recent years.

According to him, companies also noticed that their invoices were being paid later and later. “That puts pressure on working capital. The logical consequence is that the risk of non-payment and bankruptcies increases. Healthy companies can also be affected by this. A large unpaid invoice is a nightmare for many entrepreneurs.”

The number of bankruptcies peaked at 911 in May 2023. After that, they decreased until August 2017. The trend then remained fairly flat until mid-2020. After that, the number of bankruptcies fell to a low of 109 in August 2021. However, from May 2022 onwards, the number of bankruptcies was consistently higher than in the same month a year earlier.