In an environment marked by economic challenges, the difficulties faced by companies are amplified, particularly affecting certain strategic sectors and highlighting the growing impact of the economic situation on the health of French companies.

A general rise in insolvencies

At the end of September 2024, business failures in mainland France had risen by 24.4% over a 12-month period. The crisis has had a disproportionate impact on sectors such as Building and Public Works (BTP), where insolvencies jumped 36.5%, as well as the Textile-Apparel-Leather sector, with an increase of 26.5%. Building and civil engineering figures also reveal a drop in building permits (-10%) and housing starts (-13.5%), indicating a marked contraction in construction activity. Europe's luxury goods sector, particularly in Italy, has also been affected, an illustrative example being the closure of 56 boutiques of the French Bayard chain.

Heterogeneous geographical distribution

Business insolvencies are concentrated in three major regions: Île-de-France, Auvergne-Rhône-Alpes and Provence-Alpes-Côte d'Azur (PACA), which together account for almost 50% of all insolvencies. The figures show a notable 35.5% increase in insolvencies in the Île-de-France region, while the PACA region recorded a 25.3% rise. The French overseas departments (DROM) are experiencing a similar dynamic, with a 26.6% rise in business failures, with Réunion alone accounting for 55% of cases in the overseas departments. Persistent socio-economic problems are exacerbating business difficulties in these regions, particularly with the recent riots in Martinique, the water crisis in Mayotte, and social unrest in response to the rising cost of living.

"Against a backdrop that remains delicate for the construction industry, the Barnier government has announced two measures that could benefit the sector: the extension of the zero-rate loan (PTZ) throughout the country to first-time buyers, and a reduction in the Energy Performance Diagnostic (DPE), an essential and compulsory tool for assessing the energy performance of a home you wish to sell or rent. "

- Max Jammot, Business Unit Manager at Ellisphere

Sector impact: construction and transport in the front line

Among the hardest-hit sectors, construction and public works remain the most affected, accounting for 27.7% of insolvencies, with a 36.5% increase in receiverships and liquidations. This sector, which is crucial to the French economy, is facing a decline in activity and economic instability which has prompted the government to take action. Two measures recently announced by the government are designed to support the construction industry: the extension of the zero-interest loan for first-time buyers to the whole of France, and the easing of the criteria for the Diagnostic de Performance Énergétique (DPE - Energy Performance Diagnosis).

The Transport and Logistics sector also recorded a 37.5% rise in insolvencies, due to falling demand and inflation in production costs, particularly impacting road transport. Other sectors, such as Personal Services (up 17.4% in insolvencies) and Textiles-Clothing-Leather, are also showing signs of difficulty. The distribution sector, despite a stable market share, also saw a significant increase in insolvencies (+15.6%).

Profile of companies in difficulty: VSEs predominate

The report reveals that VSEs (very small businesses) are particularly vulnerable, accounting for 87.8% of companies in default. SMEs (small and medium-sized enterprises) and ETIs (intermediate-sized enterprises) are less affected, but also show an upward trend, by 16.4% and 10.3% respectively. The age of companies plays a significant role in their resilience: young companies less than 3 years old saw their insolvencies rise by 191.7%, while those over 20 years old also showed a significant increase, reflecting difficulties across all age brackets, but more accentuated for younger and less established companies.

The results of this study highlight a worsening economic situation for French companies, faced with difficult market conditions and increased inflationary pressure. Although the government has introduced certain support measures, key sectors such as construction, transport and textiles remain particularly fragile. This rise in insolvencies could be prolonged if structural reforms or additional support are not put in place to boost activity and strengthen business resilience in the hardest-hit sectors.