Higher rates of business failures and insolvencies observed in approximately 80% of developed economies
## Global Business Insolvency Trends: A Focus on Italy and Western Europe
In a recent report, Coface, a leading company that provides overviews of business insolvency risk assessments in over 160 countries and 13 sectors, has highlighted the current global business insolvency trends. The report, titled the 'Country and Sector Risk Barometer', reveals that Italy is the only Western European country with a "very high" level of business insolvency risk, affecting the construction, textile-apparel, automotive, and metallurgical sectors.
The construction, textile-apparel, automotive, and metallurgical sectors in Italy are under significant stress due to a combination of factors such as economic instability, geopolitical tensions, and sector-specific challenges. The metallurgical sector, in particular, is experiencing a surge in insolvencies, exacerbated by global steel overcapacity, unfavourable macroeconomic conditions, and energy tensions.
On the other hand, the energy and pharmaceuticals sectors in Italy have a "low" risk level of business insolvency. Spain, Portugal, the Netherlands, and Belgium also have a "low" level of business insolvency risk, according to the report.
The report further reveals that France, Germany, and the UK show a "quite moderate" risk of business insolvency, while Norway, Denmark, and Switzerland have a "very low" risk of business insolvency.
Globally, the Dun & Bradstreet Global Bankruptcy Report 2025 notes that almost 80% of advanced economies have registered an increase in insolvencies in the first quarter of 2025 compared to 2024. This trend is attributed to economic challenges such as inflation, interest rate hikes, and supply chain restructuring.
Trump's decisions on tariffs and Middle East tensions are redrawing an unpredictable economic landscape for 2025-2026, adding to the global economic challenges. The global economy is navigating between expected slowdown and escalation risks, which are expected to influence insolvency trends in the coming years.
In Europe, countries like France and Germany are forecasted to have around 63,000 and 23,000 business insolvencies, respectively, in 2025. While the European credit conditions are improving, they remain constrained, which can affect insolvency rates. Ireland, on the other hand, has seen a slight decrease in insolvency levels in the first half of 2025 compared to the previous year, with a notable rise in Court Liquidations and Receivership appointments.
The 'Country and Sector Risk Barometer' is a valuable tool for businesses and investors to understand the insolvency risk landscape and make informed decisions. It is essential for companies to stay informed about these trends and adapt their strategies accordingly to navigate the challenging economic landscape.
The 'Country and Sector Risk Barometer' also sheds light on the business insolvency risks in the manufacturing industry, with Italy showing high risk levels in sectors such as construction, textile-apparel, automotive, and metallurgical industries. On the financing side, the report indicates that advanced economies are experiencing an increase in insolvencies, with almost 80% registering an uptick in the first quarter of 2025, due to factors like inflation, interest rate hikes, and supply chain restructuring.
