Source: aicep Portugal global
The number of company bankruptcies in the European Union (EU) rose 24 percent in the second quarter of 2021 compared to the same period in 2020. However, the registration of new companies also increased by 53 percent in this period.
Data was released on 25 August by the EU statistical institute, Eurostat, indicates that “annual comparisons show that the number of new business registrations increased by 53 percent in the second quarter of 2021 compared to the previous year, while the number of registered bankruptcies increased 24 percent”.
Eurostat points out, in these statistics, there was a decrease in bankruptcies in the first two quarters of 2020, when the Covid-19 pandemic began and became more accentuated, due to “government measures to support companies during the crisis, which allowed for companies avoid” this scenario.
In the quarter-on-quarter variation, the statistical office notes that in the second quarter of 2021, declared bankruptcies in the EU rose by 1.8 percent compared to the first few months of this year, while new business registrations increased by 5.3 percent compared to the previous quarter.
In general, according to Eurostat, there has been a “declining trend in the number of bankruptcy declarations”, although with some increases between 2017 and 2019, which are now also occurring.
And after “considerable decreases in the first and second quarters of 2020” related to the tax measures adopted by countries to avoid the economic effects of the pandemic, “the number of bankruptcy declarations then followed an upward trend since the third quarter of 2020, which also continued in the second quarter of 2021”, says the organization.
With regard to the number of new business registrations, it increased in the EU from 2015 until the end of 2019, according to Eurostat, which points out that “the trend was interrupted with a fall in the first and second quarters of 2020, to recover again in the third quarter of 2020”.
“There was a slight decrease in the fourth quarter of 2020. The number of registrations then showed a very slight increase in the first quarter of 2021 and a more visible increase in the second quarter of 2021”, it adds.
Portugal ranked second
By Member States, among available data for the second quarter of 2021, the largest quarterly increases in new business registrations were observed in Ireland (+213.6 percent), Portugal (+36.1 percent) and Slovakia ( +19.7 percent), while the biggest declines were registered in Bulgaria, Lithuania (both -4.1 percent) and Romania (-3.5 percent).
Also comparing the second quarter of 2021 with the first quarter of this year, among the EU countries for which data are available, the largest increases in bankruptcy declarations were seen in Lithuania (+21.5 percent), Slovakia (+20,3 percent) and Estonia (+19.1 percent), while the biggest falls were seen in Romania (-35.5%), Poland (-30.8%) and the Netherlands (-6.3%).
By activity, the statistical office said that, after a sharp decline in new business registrations in all economic areas, in the first and second quarters of 2021 this number increased particularly in transport, information and communication, financial and insurance activities.
With regard to bankruptcies, in the second quarter of 2021 the number of bankruptcy declarations increased mainly in construction and information and communication services.