The invasion of Ukraine by Russian troops at the end of February 2022 massively changed the economic framework conditions throughout Europe. Western states reacted to the attack with far-reaching economic sanctions against Russia and world markets were thrown into turmoil. The direct consequence of the war in Eastern Europe was a sharp rise in energy prices, as Russia largely ceased to be a major exporter of oil and natural gas. At times, fears of an energy shortage became real. Triggered by the energy price hike, European countries slid into general inflation with inflation rates of 10% and more. The economic upswing that began after the end of the pandemic restrictions came to a grinding halt in the course of 2022. Thus, by the end of the year, a recessionary mood was spreading. In addition, the central banks raised interest rates as part of the fight against inflation. This also increased the burden on European companies, which had not yet fully recovered from the Corona crisis. Once again, governments had to intervene with aid measures for consumers and businesses to at least somewhat mitigate the price explosion.

In this report we show the situation of corporate stability in Europe with regard to insolvencies and the risk of insolvency. Particularly for medium-sized export companies that are not represented with their own production or sales bases in other European countries, it is crucial to know what economic risks exist with their business partners on the other side of the border.

2022 saw a noticeable increase in corporate insolvencies in the countries of Western Europe, which for the purposes of this analysis refers to the EU-14 countries as well as Norway, Switzerland and Great Britain. Compared to the previous year (in 2021: 112,686 cases), the number of corporate insolvencies increased by 24.2%. A total of just under 140,000 corporate insolvencies were registered. These are the highest figures since 2019.

There was a noticeable increase in insolvency cases in all the main economic sectors. The number of cases in the trade sector (incl. hotels and restaurants) rose by 34.5% within one year. This development reflects the difficult Corona years and the current weakness in consumption due to record inflation. In the construction industry, insolvencies rose by 24.7% and in the service industry by almost 20%. As recently as the previous year (2021), two economic sectors (trade, manufacturing) had a declining insolvency trend.

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Source: CREDITREFORM.