Bankruptcy can be frightening for many businesses. However, it can give a fresh start to those facing severe financial difficulties and overwhelming debt.
From 1980 to 2023, over 40,000 companies filed for bankruptcy in the US. The most bankruptcies occurred in the fourth quarter of 1987, with 82,446 companies filing.
In this article, learn about business bankruptcy data by industry, year, and trend in the US. Continue reading for more information!
Editor’s Choice
- 14,578 companies filed for insolvency in Germany.
- In the UK, 1 in 202 active companies entered insolvent liquidation in 2022.
- The telecom industry accounted for 36 of the 257 bankruptcy filings, representing 14%.
- In 2020, the Mining, Oil, and Gas sector encountered 44 bankruptcies.
- The Retail Trade industry had 31 bankruptcies in 2020.
- In 2021, 6,691 businesses in the US went bankrupt.
Overview of Bankruptcy Statistics by Industry 2023
The industries with the highest number of bankruptcies in the first quarter of 2023 were:
- Financial services and other services (310)
- Wholesale and retail trade (240)
- Construction (236)
- Accommodation and food service activities
AIG Financial Products Corp. is the top company with the largest bankruptcy in 2023, carrying liabilities worth $37.70 billion.
These events highlight the need to monitor these industries’ economic difficulties to prevent harmful effects and maintain a resilient economy. The following sections will teach you about bankruptcy rates in different industries, including yearly statistics and trends.
Statistics on Corporate Bankruptcy by Industry
In 2023, 57 companies filed bankruptcy petitions in February, the highest number in a single month since March 2021. In January, 54 petitions were filed.
Businesses and stakeholders can gain valuable insights to make informed decisions by studying this bankruptcy data. Now, let’s delve into corporate bankruptcy statistics by industry:
1. 14,578 companies filed for insolvency in Germany.
(CRIF)
Germany had 14,578 corporate insolvencies last year, up 4.2% from 2021 (13,991 corporate bankruptcies in 2021). This is the first increase since 2009, although corporate insolvencies remain low.
Interestingly, 2021 has the fewest insolvencies since the new Insolvency Code was introduced in 1999. 2022 witnessed nearly 60% fewer company bankruptcies than in 2003, with 39,320 corporate bankruptcies.
While the increase in insolvencies may raise concerns, the overall low levels indicate a relatively healthy business environment.
2. The forecast for 2023 predicts 100,000 private insolvencies in Germany.
(CRIF)
Private insolvencies in Germany decreased in 2022. There were 96,231 private insolvencies, an 11.7% decrease compared to the previous year (109,031 in 2021).
The sharp rise in insolvencies seen in 2021, with a 93.6% annual increase, has now been reversed. The increase was mainly because many individuals postponed their insolvency applications until 2020.
3. In the UK, 1 in 202 active companies entered insolvent liquidation in 2022.
(GOV.UK)
In 2022, one out of every 202 active companies (or 49.5 out of every 10,000 active companies) entered insolvent liquidation.
This was up from 32.9 out of 10,000 active companies in 2021, exceeding the pre-pandemic level of 41.9 in 2019. The increased bankruptcy rate reflects a challenging business environment due to the pandemic and other factors.
Bankruptcy Statistics by Industry by Year
The construction sector experienced the highest number of insolvencies in 2022, followed by the following:
- Trade sector (including motor vehicle maintenance and repair)
- Hospitality catering logistics
- Manufacturing
- Gardening and landscaping companies
This index identifies financially vulnerable industries. It allows stakeholders to focus on industries that need more support or strategic prevention.
Here are the top bankruptcy statistics, categorized by industry and year:
4. In 2022, real estate, retail, and consumer restructuring accounted for 48% of filings.
(PWC)
The restructuring affected the real estate, retail, and consumer sectors the most. Financial services had the highest number of billion-dollar cases.
This highlights these sectors’ significant impact on bankruptcy activity and the overall economy.
5. UK construction firms experiencing “critical financial distress” climbed by 51% from the same period in 2021.
(Begbies Traynor)
Construction bankruptcy rates are greater than the economy’s 19% growth. However, new data shows construction company bankruptcies have increased since last year.
Moreover, the number of these companies with serious financial problems is also rising. There is no one reason why the construction industry is struggling financially. Instead, several key factors continue to lead to more and more bankruptcies.
Trends in Bankruptcy by Industry
30% of bankruptcies filed in the first half of 2022 were accounted for by Finance, Insurance, and Real Estate companies. Understanding these patterns can help stakeholders make educated choices and plan for the changing economy.
Here are the leading patterns or developments in bankruptcy across various industries:
6. In 2001, a record 257 publicly listed firms filed for bankruptcy, up 46% from the year before.
(FDIC)
Since 1997, publicly listed company bankruptcy filings have increased. In 2001, 257 publicly traded companies filed for bankruptcy, up 46% from 2000.
This shows the necessity of monitoring publicly listed firms’ financial health and the risks associated with their financial troubles.
7. The telecom industry accounted for 36 of the 257 bankruptcy filings, representing 14%.
(FDIC, BankruptcyData.com)
Bankruptcy filings by publicly traded companies in 2001 were evenly distributed across industry sectors, with a notable concentration in the telecom industry. This demonstrates the need for careful evaluation and risk assessment.
8. In 2020, the Mining, Oil, and Gas sector encountered 44 bankruptcies.
(Cornerstone)
From 2014 to 2016, oil prices plummeted, causing several company failures. However, the rate of filings significantly worsened with the further decline in oil prices in March and April 2020.
9. The Retail Trade industry had 31 bankruptcies in 2020.
(Cornerstone)
The Retail Trade industry experienced 31 bankruptcies in 2020 due to the challenging circumstances caused by the COVID-19 pandemic. Lockdowns and reduced demand for in-store shopping contributed to the difficulties faced by traditional retailers.
10. Mining, Oil, and Gas bankruptcy filings increased by 69% from 2019 to 2020.
(Cornerstone)
Bankruptcies in this sector can become complex due to environmental remediation liabilities. Extreme weather events and fires continue to contribute to bankruptcies in the electric utility industry.
US Bankruptcy Statistics by Industry
There are different chapters or types of bankruptcy filings available in the US, including Chapter 7, Chapter 11, and Chapter 13.
In April 2023, bankruptcy filings, including all chapters, reached 35,479, marking a 9% increase compared to April 2022’s total of 32,530.
Here are the most significant bankruptcy statistics for different industries in the US:
11. In 2021, 6,691 businesses in the US went bankrupt.
(BankruptcyData)
There were 6,691 commercial bankruptcy filings in 2021, a significant decrease compared to 2020 and 2019. The real estate sector had the highest bankruptcy filings, with over 1,100 cases.
12. 30% of bankruptcies filed in the US in the first half of 2022 came from insurance, finance, and real estate companies.
(Cornerstone Research)
A report by Cornerstone Research revealed that in the first half of 2022, 30% of financial, insurance, and real estate companies filed for bankruptcy. However, the number of large corporations filing for bankruptcy significantly dropped in 2022 compared to historical averages.
13. Bankruptcy filings in the US increased across all chapters in March, with commercial filings up 79% year-over-year.
(Epiq)
New bankruptcy filings in March 2023 showed year-over-year increases across all major filing categories in the United States. This trend has been observed for three consecutive months.
Final Thoughts
Statistics on bankruptcy by industry tell us a lot about the financial health of different sectors and the problems they face.
By being aware of the trends in bankruptcies, stakeholders can see where there are risks and opportunities for investments and strategic actions.
