The corporate failures sharply, including in the construction of

On the some 13,000 business failures recorded over one year in the second quarter of 2017, the study Altares published July 10, reveals that 3.311 have been encrypted in the construction sector, a drop of -16,6%. A finding never observed in the last twenty years.
With 12.925 corporate failures recorded on one year in the second quarter of 2017, the research firm Altares, reveals the July 10, 2017, that the number of business failures* decreased 7.8 % year on year. We have not seen for twenty years. A finding that is also reflected in the construction sector. The number of failures is evaluated at 3.311 dropped -16,6 % in the second quarter of 2017, compared to the same period in 2016.


Same observation in the building and real estate


Overall, the building has recorded 64 saves, 963 judicial remedies and 2.284 court-ordered liquidation, reveals the study Altares. In detail, the building and real estate account for, respectively, 27 and 37 backups ; 795 and 168 judicial remedies and finally 2.006 and 278 court-ordered liquidation on the same period.


“Even up until 1997, there is not as much of positive indicators on all sectors and enterprise sizes also varied”, noted Thierry Millon, head of studies of Altares. In the same analysis, the firm reminds us that the year 2017 began with a first quarter fell for the first time since 2008 below the threshold of 16,000 failures. In the first three months of the year 2017, 15.667 companies had been placed in backup procedure, recovery or judicial liquidation, against 16.309 a year earlier.


In the end, “for the first time since 2012, more than 30 % of the judgments are openings for legal redress, as signs that the companies appear before the court with a financial position non-final to allow the latter to consider a solution rebound continuation or assignment”, says Thierry Millon.


The TPE also in a good positive trend


Another point also discussed in the study : the failures recorded according to the types of businesses. They are retreating so at a rate proportional to the size of the company, the study finds. “The decline is 10% for the TPE of 3 to 10 employees, 13% of SMES with 10 to 49 employees and even 34% for those with 50 to 99 employees,” she adds. Only firms of larger size, above 100 employees, displayed a negative change (+11%). These represent only some thirty companies, is a volume which remains low after a second quarter to the lowest in 10 years. 20% of these companies have avoided bankruptcy.


As for companies with fewer than three employees, “they are naturally the most likely to file for bankruptcy but they also reflect the second quarter, on good trends after a first quarter stable or even a hesitant”, says Altares. In total, nearly 9.397 micro-enterprises which have fallen into failure, in the second quarter of 2017, that is to say, 6.7 per cent less compared to the same quarter of 2016. Which is the best figure since 2010.
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  • The business failures fall heavily in the CONSTRUCTION industry
  • The business failures still down in construction


That means the business failure ?

*Note that the business failure corresponds to the opening of a safeguard procedure, receivership or judicial liquidation direct from a commercial Court or high court. “This means, therefore, or amicable procedures (mandat ad ‘hoc or conciliation), or the suites of the opening (case of a plan or conversion to liquidation)”, specifies Altares in its methodological note. The judgment pronouncing the legal redress open an observation period to allow the administrator to prepare the economic balance and develop a recovery plan. The duration of the observation period is six months, renewable once, with an exceptional extension of six months at the request of the prosecutor of the Republic, and a total of 18 months.


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