Major insolvencies across the world continue to rise in key sectors. Focusing on companies with a turnover in excess of EUR50m, research undertaken by Euler Hermes Economic Research Department, identifies the global regions where major insolvencies in sectors such as Retail, Construction and Agrifood are topping the charts.
At a global level the first half of 2018 (H1) saw a semi-stable number of major insolvencies with just an increase of 3 failures compared with the same period 2017. The total in H1 2017 was 172, where H1 2018 peaked at 169. However the cumulative turnover of those insolvencies rose 24% to EUR62.3bn. This rise in severity comes from the biggest top failures and more companies with a turnover above EUR100m. There is concern on this heightened severity impacting other companies along the supply-chains. Retail, Agrifood and Construction are the most effected with a total of 70 insolvencies of companies with a turnover of more than EUR50m between them.
Asia and Western Europe impact the global position significantly. Asia registered an increase of 11 failures on 2017, with construction (+7) and Energy (+6). Western Europe sectors being hit are Retail, up 7 on last year with the UK and Italy suffering some significant cases. Services, Agrifood and Construction are also flagged.
The US, though it has seen a reduction of 3 cases on 2017 figures, is the main contributor to the top insolvencies with 2 of the largest failures. As with other regions the sector hardest hit is Retail with 8 instances.
Central and Eastern Europe continue to see a reduction down 12 on last year. This regions sector with the highest number of cases is Construction with 5 followed closely by Automotive, Machinery/Equipment, Energy, Services and Agrifood, all experiencing 3 companies each.
Africa/Middle East and Latin America only saw 3 major insolvencies in the first half of 2018, the lowest of all the regions reviewed. One each for Computers and Telecom, Textiles and Retail.
Overall Retail is the outright front runner with the most large insolvencies and highest average size of company in terms of turnover (EUR805m).
Source: Euler Hermes, Economic Research Department 20.07.2018