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The survey reveals that 2,301 companies had signs of bankruptcy at the end of June, but only 629 companies went bankrupt during the year, at least four times more than in the pre-pandemic period. 2019 In Lithuania, 2,571 companies started or filed for bankruptcy.
Business “zombies” are companies that would have gone bankrupt under normal circumstances, but still remain in the business ecosystem due to state support measures. During the study, companies were evaluated according to 2019 and 2018 bankruptcy signs and the actual number of corporate bankruptcies.
Business credit quality is improving, risk is decreasing
“Two-speed companies have been formed in Lithuania, sectors that have suffered a strong pandemic impact, mainly accommodation, catering establishments, small commercial companies and companies that have not felt the impact at all. The first is to try to take advantage of the summer quarantine releases, make money and cover debts, the second, having activated the fifth or sixth gear, is to implement the development and successfully grow the business ”, says Jurga Tamašauskaitė, Solutions Manager Scorify commercials.
This is also indicated by the constant improvement in the risk situation of companies, since May. the participation of venture companies began to decline. In March, the share of high-risk companies reached 14 percent. rated companies, since May for the second month in a row has been steadily declining. July. this figure was reduced to 12 percent.
“For several months, the number of low-risk companies has also been increasing; currently there are 48 percent of these companies in Lithuania. And it improved by 2% during the year. Points, – says J.Tamašauskaitė. – This Credit risk situation reinforces the positive direction of companies, on the other hand, it does not reduce the problems of risky companies.At the end of the quarantine, companies must start paying current taxes to the state and pay accumulated debts in about few years. Under current conditions, we are likely to see an increase in the number of bankruptcies already in autumn. However, if the pandemic situation is unfavorable and we have another quarantine, the agony of companies may carry over to later periods, what schedules the problems of mutual agreements and negatively affects the business ecosystem in general. “
Construction is the fastest growing employer
The success of companies in returning to their previous growth trajectories is also demonstrated by the rapid growth in the number of employees. Compared to last year, companies currently employ 4 percent. more employees. During the year, the number of employees grew more in construction companies – 9%, in the services sector – 8%. Agriculture alone is still employed at 2.9 percent. fewer employees than last year. During June. The number of employees in the service sector grew the most: 2%.
“Only the wholesale and agricultural sectors continue to employ fewer people than before the pandemic; in all the others, the number of employees has recovered and continues to grow successfully”, comments J. Tamašauskait
Compared to last year, companies in Klaipėda, Kaunas and Tauragė counties expanded faster: Tauragė’s business is currently breaking records, as it was able to employ 2.7 percent during the year. more employees.
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