Romania: Top worst-hit industries by the number of bankruptcies
25-09-2009
In first half this year, Romanian economy plunged 7.6%, payments fell 25% while number of jobless climbed 50%. Factoring in the 10,000 bankruptcies brings Romania to the top of the list of worst-hit countries by recession. Needless to say that another 10,000 private business are likely to go out of business in the next few months by year-end.
The economic crisis has crippled companies’ business by sales drop, tighter lending conditions, dried up cash flow and snowballing bankruptcies.
Retail trade tops the list with the most bankruptcies filed in the first half 2009, namely 2,136 cases or 20.47% of total number of failures, reports French credit insurer Coface, based on the number of cases registered at the national trade register.
Coface report says by the generic term “bankruptcy”, all bankruptcies, liquidation and winding up procedures against Romanian companies have been taken into consideration.
In the first half this year, 10,435 companies were in various stages of insolvency procedure. Compared to year-ago half, the number of companies that filed for bankruptcy climbed 40% from 1,434.
Coface said the sectors most affected by insolvency procedures were retail and wholesale trade and constructions that account for a combined 50% in total number of bankruptcies.
“Large retail groups remain the no1 threat to the collapse of small retailers who deal with a decline in number of clients. It remains to be seen whether consumers will shift to small stores, as people prefer buying less from a store near the house instead of going to a supermarket where they tend to fill the shopping cart”, said Coface.
Sector Number of companies in insolvency procedure
Total cases(%)
Retail trade 2,136 20.47
Wholesale trade 2,134 20.45
Constructions 1,328 12.73
Transport 661 6.33
Restaurant 592 5.67
Other services 577 5.53
Wood & Paper 534 5.12
Textile 442 4.24
Agriculture 372 3.56
Food & Beverage 365 3.5
Metallurgy 263 2.52
Chemical Industry 139 1.33
Real Estate 137 1.31
Waste Collection 127 1.22
Automotive 101 0.97
Information Tech 92 0.88
TOTAL 10.435 100
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