According to the creditor protection association Creditreform, the number of company bankruptcies has risen by almost 60 percent to 4,913 procedures. But that’s no reason to panic. The numbers also reflect a catch-up effect after the historically low insolvency figures during the pandemic.
“Austrian insolvency is returning to normal,” the association wrote in a broadcast on Wednesday. “After the end of the Corona aid measures, a return to the pre-pandemic level was to be expected,” said Managing Director Gerald Weinhofer.
Many companies would have had problems before the pandemic. This can be seen above all in the sharp increase in the number of penal rejections. This has almost doubled, in the previous year the number of cases dismissed for lack of assets rose by 95.5 percent to 1,951.
Most bankruptcies in retail
Nevertheless, the corona lockdowns, followed by the Ukraine war and high inflation, were “too many polycrises for many companies,” said Weinhofer. Most bankruptcies were in trade (862), business services (841) and construction (805).
Also for the coming year, no all-clear can be given for the insolvency events. “Increasing energy costs and rents as well as the high level of collective agreements coupled with an expected recession form a dangerously toxic environment,” says Weinhofer. He expects around 6,000 company insolvencies in 2023.
Also more private bankruptcies
Personal bankruptcies also went up last year. In 2022, the number rose by 18.6 percent to 9,079 procedures. However, the pre-pandemic level has not yet been reached. The trend for this year is pointing strongly upwards. “Despite the good situation on the labor market and state aid, the general wave of inflation is causing more and more Austrians to become insolvent. In 2023 it will get worse,” says Weinhofer.
Pressure on Private does not ease
Government grants would still prop up many, but in the new year higher utility bills and rents would hit. In addition, there would be rising prices for food and credit. “There would have to be massive state intervention through compensation payments and price controls if one wanted to avoid exceeding the threshold of 10,000 private bankruptcies towards the end of the year,” said Weinhofer.
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