Corporate insolvencies in France: all good things come to an end
The third quarter of 2018 marks a turning point for companies in France: for the first time in two years, insolvencies increased by 2.3% compared to the same quarter of the year previous. This trend reversal is consistent with the slowdown in growth to 1.6% in 2018. As this decline in French growth can chiefly be attributed to household consumption, sectors such as personal services, food retail, and automotive have been the most affected by the rebound in insolvencies. At the same time, the slowdown in construction sector activity (27% of the total number of insolvencies) is also reflected in the recent rise in insolvencies. The trend is the same in personal services (which accounts for one insolvency per five).
Unsurprisingly, the reversal in the cycle has until now affected micro-enterprises with revenues of less than EUR 500,000, which have recorded a rise in insolvencies, unlike larger companies. The cost of insolvencies, both in financial and employment terms, has therefore continued to fall. Moreover, this upward trend affects two-thirds of the regions of France.