Record first period in job creation: around 61,000 businesses opened, best in 15 years
During the second quarter of 2023, the European Union saw a continued rise in operations that ended with formal bankruptcy filings across member states. The total progressed by 8.4 percent from the previous quarter, marking the highest level since data collection began in 2015. This rise represents a sustained upward trend that stretches over multiple quarters and underscores ongoing pressures faced by companies across the bloc. The community statistics office confirms this upsurge, reflecting more firms declaring insolvency than at any comparable period in the record. The trend also extended into the Eurozone, where a similar increase was observed, reinforcing the broad nature of the momentum across the shared economic area.
In the second quarter, the number of bankruptcy filings rose in all major sectors, signaling a broad-based dynamic rather than a problem confined to a single industry. The most notable increases were concentrated in accommodations and food services, transportation and storage, and health-related services, with proportional gains of 23.9 percent, 15.2 percent, and 10.1 percent respectively. These sectors show that consumers and businesses have been facing tight margins, rising costs, and evolving demand patterns that together contribute to insolvency filings across diverse activities.
When comparing to the pre-pandemic baseline of the fourth quarter of 2019, the second quarter of 2023 displayed higher bankruptcy activity in most sectors of the economy. The gains were especially pronounced in accommodations and food services, which registered an 82.5 percent increase, and in transportation and storage, with a 56.7 percent rise, illustrating how the post-pandemic environment has shifted the risk landscape for these industries.
On the other hand, two sectors showed relative resilience, with bankruptcy filings lower than the pre-pandemic benchmark. Industry sector filings declined by 11.5 percent, and construction filings fell by 2.7 percent, suggesting some structural differences in how these areas adapted to the evolving market conditions during the quarter.
From a country perspective within the EU, the quarterly pattern varied. Hungary led the gains with a 40.8 percent rise, followed by Latvia at 24.8 percent and Estonia at 24.6 percent. Conversely, several nations recorded declines, including Cyprus, down 48.5 percent, Croatia down 23.6 percent, and Denmark down 15.9 percent, highlighting the uneven impact of economic shifts across the region.
Spain stood out as well, with bankruptcies increasing by 19.9 percent in the second quarter compared to the prior three months, yet ending the quarter with a 2.1 percent decrease from a higher baseline earlier in the year. This was the largest quarterly uptick since the first quarter of 2022, underscoring a mixed but still challenging environment for Spanish firms.
In parallel with bankruptcy trends, Eurostat reported a slight contraction in the number of registered companies across the EU in the second quarter of 2023, falling by 0.6 percent after a 2 percent rise in the previous quarter. For the euro area as a whole, registrations grew by 1.1 percent between April and June, following a 2.1 percent increase in the prior quarter. Ireland emerged as the fastest-growing country for registrations, with a 50.9 percent rise, ahead of Slovenia at 30.2 percent and Germany at 9.6 percent. The most notable declines appeared in Poland at 11.3 percent, Bulgaria at 9.1 percent, and Denmark at 9 percent.
In Spain, the trajectory for registered companies turned down by 1.4 percent in the second quarter after a 7.9 percent increase in the first three months of 2023, reflecting the ongoing volatility in business creation patterns across the country. The overall picture in the EU shows a dual narrative: rising insolvencies in several sectors and steady movements in the number of new company registrations, with country-specific dynamics shaping the broader economic landscape during this period.