Coface Anticipates Company Insolvencies in Western Europe to Drop

Despite 10 out of 12 Western European countries showing improvement, current insolvency levels have yet to return to their pre-crisis state, according to a Sept. 8 report from Coface. The forecasting model, which includes variables such as business climate, investment and number of building permits issued, is predicting that company insolvencies in the Western European region will decline by 7% this year.

“Company insolvencies in Western Europe have experienced two successive storms,” the report states. “The subprime crisis, which made insolvencies jump by an average of 11% in the 12 countries studied, was unsurprisingly followed by further shock waves. … While insolvencies continue to increase in Italy and Norway, they are seeing the positive impact of the timid recovery in the eurozone in 10 other countries,” which are comprised of Germany, Belgium, Spain, Denmark, Finland, France, the Netherlands, Portugal, United Kingdom and Sweden.

Coface attributes the improved outlook to private consumption, noting that the eurozone’s gross domestic product increased by 0.3% in its second quarter. Economists anticipate growth to reach 1.5% in 2015. “The zone’s importing countries have also benefited from the depreciation of the euro and the fall in oil prices,” Coface said. “However, a close watch should be kept on risks linked to slower growth in emerging countries.”

- Jennifer Lehman, NACM marketing and communications associate

No comments:

Post a Comment