Collective proceedings, a deterioration which continues at the end of August 2022

A less flourishing economic situation

According to the financial information agency S&P Global, the French economy slowed in August. Services activities and manufacturing output declined for the third consecutive month. For its part, the Banque de France reports a seasonal contraction in construction.

While the Banque de France confirmed 0.5% GDP growth in the second quarter of 2022, it remained cautious for the third quarter in an uncertain context. According to INSEE, inflation stood at 5.8% year-on-year at the end of August, with energy prices still high and an acceleration in the rise of prices for manufactured goods, food and services.

A quarter more insolvencies than in the previous year

Over the 12 months to the end of August 2022, the number of insolvencies (opening of receivership and direct judicial liquidation) rose by 27%, affecting nearly 34,900 companies in mainland France. The level is now higher than in 2020. For their part, the number of safeguard procedures has increased by 23% with nearly 900 openings, a level that is now close to the pre-Covid-19 crisis level. All of these procedures threaten approximately 154,000 salaried positions.

Over the first eight months of 2022, the number of such procedures (insolvencies and safeguards) is close to 25,000. This represents an increase of 48.2% compared to January-August 2021.

Young VSEs on the mat

Structurally, these insolvency proceedings mainly affect commercial companies (85%). Moreover, they mainly concern companies that have been in existence for less than 10 years (64% of insolvencies and 52% of safeguard procedures). The strongest evolution is for companies less than 3 years old created just before the Covid-19 crisis. In the case of receiverships and liquidations, 90% are in the VSE category and 69% in the case of safeguarding.

The Hauts-de-France region in great distress

Geographically in metropolitan France, the majority of procedures are concentrated in 4 regions: Île-de-France, Auvergne-Rhône-Alpes, PACA and New Aquitaine. Over the last 12 months, three regions have suffered particularly. The Hauts-de-France region has seen the number of receiverships and liquidations increase by 57% over the year and the number of safeguards by 62%. The Centre-Val de Loire region has seen a 41% increase in insolvencies and a 44% increase in bankruptcy protection. Finally, Brittany has not been spared either, with +39% and 49% respectively for these same procedures.

Distribution and consumer goods affected

From a sectoral point of view, the construction and public works sector and personal and business services account for 53% of all receiverships and liquidations, as well as 43% of all insolvencies. Against a backdrop of inflation and household consumption arbitration, the number of insolvencies in the Retail sector has risen by 42% over the past year, Consumer Goods by 36% and Household Goods by 39%.

Some manufacturers are also suffering from the soaring prices of raw materials and energy. This is particularly true of the food industry, where the number of receiverships and direct liquidations has increased by 49%, while the number of protective measures has risen by 91%.