TOKYO, Apr 09 (News On Japan) - Japan witnessed over 9,000 corporate bankruptcies nationwide in fiscal 2023 for the first time in nine years.
According to Tokyo Shoko Research, there were 9,053 cases of corporate bankruptcy (with debts of 10 million yen or more), marking a 31% increase from the previous fiscal year, which had 6,880 cases. The total debt amounted to 2.463 trillion yen.
This resurgence to over 9,000 cases hasn't been seen since the fiscal year 2014, which recorded 9,543 cases. All ten industry sectors experienced an increase in bankruptcy cases, with the "services and others" sector leading with 3,028 cases, a 34% increase from the previous year.
The construction industry faced the largest growth rate, with a 39% increase to 1,777 cases, attributed to the rising costs of materials, labor, and a shortage of workers. The primary cause of bankruptcy was identified as "sales slumps," accounting for 6,624 cases (a 35% increase), but bankruptcies due to high prices (684 cases, a 73% increase) and labor shortages (191 cases, a 141% increase) have also surged dramatically.
Tokyo Shoko Research points out that the business model for small and medium-sized enterprises has been built on the premise of low interest rates. With the potential removal of the Bank of Japan's negative interest rate policy, there's a strong possibility that corporate bankruptcies may further increase, particularly after the summer.
Source: ANN
