The creditors’ protection association Creditreform counted 1,840 corporate insolvencies in the first three quarters, 766 fewer than in the same period in 2020. The number of insolvencies opened fell by a fifth to 1,234. In the first half of the year, however, the decline in openings was still 36.5 percent.
2,500 companies could go bankrupt
“Due to the extended relief measures, the company insolvencies have gone from one historic low to the next,” said Gerhard Weinhofer, Managing Director of the Austrian Creditreform Association. “Now it is clear that Austria’s economy has recovered very quickly, especially in the 3rd quarter, after the sharp slump at the beginning of the corona pandemic. With the reinstatement of the obligation to file for insolvency and the end of the deferrals, you will return to normalcy and that will lead to more bankruptcies than in the previous months. “
As soon as the CoV supports are ended, the number of insolvencies would slowly rise again to the usual level of around 5,000 proceedings per year, say the more creditors. In an analysis for Creditreform, Prof. Walter Schwaiger from the Vienna University of Technology calculated that around 2,500 companies would currently be at risk of insolvency if the support were ended.
Biggest decline in tourism
Due to the lack of major insolvencies so far, both the insolvency liabilities (approx. 440 million euros) and the jobs affected (approx. 4,200) are falling sharply, writes Creditreform.
Vorarlberg (minus 50.0 percent), Salzburg (minus 48.3 percent) and Carinthia (minus 46.9 percent) recorded the greatest decline in company bankruptcies. The highest levels of insolvency were in the federal capital with over nine bankruptcies per 1,000 companies, the lowest in Vorarlberg with just under two out of 1,000 companies. Austria-wide 5 out of 1,000 companies go to the bankruptcy court at the same time.
Insolvencies in tourism (“accommodation and restaurants”) fell the most with a minus of over 40 percent, in industry with minus 38.1 percent and in “credit and insurance” with minus 28.4. The relative greatest insolvency impact is in construction with 16 companies each and in transport with 15 out of 1,000 companies each.
Lowest personal bankruptcy in 15 years
Personal bankruptcies were at their lowest level in 15 years. According to Creditreform, the total number of personal bankruptcies fell by 13 percent to 5,174 proceedings. The number of debt settlement procedures opened has increased by eleven percent to 4,860 cases. “The consumption of Austrians was strongly inhibited due to lockdowns, short-time work and general worries about the workplace. This led to an increase in the savings rate, ”said Weinhofer.