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Recent UC statistics show that bankruptcies in the hotel and restaurant industry in April have increased by 159 percent compared to the same month last year. “Economically stable companies that have been affected,” says UC economist Richard Damberg.
New statistics from the credit reporting company UC show the continued sharp increases in bankruptcy in April.
Bankruptcies in the country have increased 30 percent in April, compared to April last year.
Bankruptcies in the hotel and restaurant industry rose 159 percent compared to the same month last year.
The total of 3.5 limited liability companies a day went bust in the segment, compared to 1.2 last year.
In the retail sector, bankruptcies have increased 56 percent compared to April last year.
UC statistics for the month of April show that several of the major industries are doing well right now, just like in the month of March.
– The hotel and restaurant industry experienced a certain slowdown as early as 2019, when the signs of an upcoming recession arrived. They now account for 13 percent of all bankruptcies. About 65 percent of bankrupt restaurant companies had three or fewer employees in their latest annual report and are therefore quite small companies. It is an industry that generally has low profitability and, therefore, low resistance to loss of income. About 15 percent of bankrupt restaurant and hotel companies had a credit rating of 30 percent or more in their latest annual report. Thus, they were financially stable businesses that were hit by bankruptcy despite this in the April pandemic. Now 3.5 companies a day go bankrupt compared to 1.2 last year, Richard Damberg, a UC economist, says in a comment.
Trading, which includes retail and wholesale sales, has also been difficult now and many shopping malls are empty.
– Many of the bankrupt companies in April are small. Three-quarters of all commercial companies have fewer than three employees. It’s everything from smaller wholesalers who deliver to restaurants to specialty retailers. Business bankruptcies include companies with good and bad key figures in the latest annual report. This means that it was the weak and the strongest companies that were unable to handle the crisis in April. In addition to small businesses, several large retailers have gone bankrupt, 21 companies had ten or more employees. Now five commercial companies file for bankruptcy per day compared to three per day last year, says Richard Damberg.
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