Insolvencies up by 19% in January – Euler Hermes

As many as 82 companies became insolvent in January, which is 19 percent y/y increase, Euler Hermes said. Euler Hermes points out that the main problem companies have of extending payment terms is the lack of a cushion caused by low margins. The largest increases were recorded year-on-year in wholesale (125 percent increase) the production sector (29 percent), and in services (22 percent). “A key competitive advantage of many manufacturers and service companies has been the low-cost base for years, resulting from the use of readily available, cheap labor. Changes in the labor market, which we observe in the recent period, led to the disappearance of this advantage. work automation, lack of product and process innovations, make it difficult or even impossible to conduct business in the current market realities,” said Euler Hermes board member Tomasz Starus. Insolvency includes the inability to pay liabilities to suppliers, resulting in bankruptcy or any form of restructuring proceedings.