The year 2022 closes with the highest number of corporate bankruptcies since the previous crisis

The Spanish economic fabric closed out a darker year than a light one. The end of most measures to contain the economy after Covid-19 and the inflationary situation that intensified the war in Ukraine mixed an explosive mixture capable of leaving thousands of companies on edge. So much so that in 2022 the highest number of bankruptcy proceedings were recorded since the previous crisis: 7,272 Spanish companies were left in bankruptcy, according to Cesce’s Informa D&B. That’s about a 25% increase in bankruptcies compared to 2021 and the highest number of companies filing bankruptcies since 2013, the worst year of the brick-and-mortar crisis, when 9,310 companies declared bankruptcy. The blow that was partly expected since the bankruptcy stay has created a bottleneck in bankruptcies since March 2020, when, due to the pandemic, the government prevented companies from asking debtors to enter what was previously known as a payment hold. But the moratorium expired on June 30, and after the summer, an avalanche of bankruptcy petitions that had contained for more than two years reached the courts. In any case, the numbers vary according to each community and sector. Catalonia was once again the region with the highest number of bankruptcies, with a total of 1,834. But on a growth level, Andalusia was the region where it rocketed, going from 492 to 711, up 44.51%. Madrid also registered a similar high (33.61%) with 1,618 bankruptcies. By sector, commerce with 1,722 ends up as the most growing in absolute terms after adding 475. It is followed by construction and real estate, with 1,397, an increase of 26%. The growth in bankruptcies in recent months in this latter sector is worrying. In December it has grown by 50% and this is when a certain paralysis in housing construction begins to be noticed. In fact, the latest Financial Stability Report published by the Bank of Spain indicates a decrease in new building permits by 8% between January and August 2022 compared to the same period in 2019. They are the latest interest rate increases by the European Central Bank. Taking Euribor to its highest level in more than a decade (up 3.3%), it tightened conditions for access to mortgages and, in turn, halted the winning streak of a real estate sector that was posting sales figures close to the years before the brick bubble burst. But at the end of last year, the trend began to reverse. In November, home purchases and sales fell by more than 8% (58,942 signatures), according to the General Council of Notaries. Real estate slowdowns were also recorded by concrete manufacturers. The sector’s employers’ association, Anefhop, estimates that 2022 will have ended with 5-7% less activity. It also expects a certain slowdown in the emergence of new projects, but an increase in the activity of those that have already started and those that are subject to the requirements of European funds, “says its general manager, Carlos Beretta. Large bankruptcies But the highest level of bankruptcies this year was observed in companies operating in the sector Energy, which experienced an unprecedented escalation in prices after the start of the conflict between Russia and Ukraine.Three bankrupt companies with the highest turnover were allocated to the supply of fuel.These are GM Fuel Service SL (839 million euros), Marillion SL (336 million euros) and Gaslow Abastecimientos SL (€289m).The list was completed by two Abengoa subsidiaries: Abengoa Energía SA (€242m) and Abengoa Agua SA (€229m).Sevillian entered bankruptcy after the government refused to bail it out and is now in the process of being sold In the courts.In all, the companies that declared bankruptcy in 2022 employed 44,155 people and had a turnover of nearly 8,200 million euros, which is 5,600 million more than those that began this process in the same months in 2021. But some experts and economists do not that. They consider the number of companies that entered bankruptcy as important as the number of companies that disappeared. 30,507 companies will be dissolved in 2022, according to subsidiary Cesce. Almost the same number of extinctions as in 2013 (31,225) and above the disastrous years for the economy as 2012 (28,687). Record related news Yes companies pay twice as much as they did a year and a half ago to renegotiate their debt Daniel Caballero More and more companies, particularly small and medium-sized businesses, are going to their banks to try to refinance their loans to try to deal with the energy crises and inflation that have sunk their businesses he believes The head of the illustrious Official College of Managing Directors in Madrid, Fernando Santiago, says that although the number of bankruptcies is high, “it does not represent the real numerical value of the companies that have disappeared.” It is estimated that the bleeding will be worse this year. “700,000 small businesses have serious liquidity problems and no corrective action has been taken. If it continues like this, there will be many more companies that close the blind than those that ask for a contest ». Last year the number of corporate disappearances would have broken all records, but bankruptcy reform, which encourages restructuring, contained fast bankruptcy filings. That is, applications for bankruptcy and extinction at the same time. Because while it accounted for 66.5% of bankruptcies in the first eight months of the year, it was only 17% in December. Recession symptoms The bad omens for the economy in 2023 come from the side of business start-ups. Last year, 99,502 were created, down 2.5%, according to Informa D&B. Despite the decline, the capital invested to create these companies increased by 2% in 2022 to 5,172 million euros. What doesn’t come up is that this is the third lowest number in the decade. In general, the outlook from corporate creation for this year is also not the best. The difficulty that will exist in accessing financing threatens this statistic. Also, the expected consumer downturn, which threatens sectors such as trade and hospitality, which last year concentrated almost a third of the new companies operating in our country. Construction and real estate led company creation in 2022 (23,027), but in 2023 it will also suffer from the sector’s correction.