Brussels, February 23, 2024 – In the final quarter of 2023, the trade intensity of Belgian companies increased for the second consecutive time, as revealed by the latest analysis from Altares Dun & Bradstreet. Trade intensity serves as a leading indicator for overall economic activity in Belgium. Compared to the preceding quarter, where trade intensity stood at 85.5, the Belgian economy has now landed at 90.9 points.
In all sectors, trade intensity increased compared to the previous quarter. Particularly in the extraction of minerals (+9.6), construction industry (+8.2), and government sector (+7.2), we observe companies engaging in more intensive trade.
Peak in Bankruptcies in 2023
In the last quarter of 2023, Belgium experienced a notable peak in the number of bankruptcies, according to recent data. In total, Altares Dun & Bradstreet recorded 3,164 bankruptcies, marking a 34.7% increase compared to the previous quarter when the number stood at 2,349. These figures also indicate a rise compared to the same period last year when there were 2,861 bankruptcies. Once again, Antwerp (14.19%), the Brussels-Capital Region (14.00%), and Liège (9.14%) recorded the highest bankruptcy rates.
"Over a period of five years, it is notable that the number of bankruptcies in Belgium reached a low point in 2020 (9,961) and 2021 (8,369)," says Joris Peeters. "This trough is likely attributed to COVID-19 support measures, allowing businesses to continue their operations with additional financial resources. As this financial aid dwindled, bankruptcies increased. This trend became evident in 2022 when 10,547 businesses faced bankruptcy. In the past year, this number further rose to 11,601 bankruptcies, indicating a 9.99% increase."
Joris Peeters, Chief Data Scientist at Altares Dun & Bradstreet, emphasizes: "While the number of bankruptcies is certainly on the rise again, it is still too early to speak of a significantly increased bankruptcy risk. When comparing the number of bankruptcies to the registered businesses in Belgium, which has steadily increased in recent years, we observe that the risk, historically, still remains relatively low. Even accounting for reduced trade activity, we are not yet at pre-COVID pandemic levels."
Relatively high bankruptcy risk in the trade, construction, and hospitality sectors
Bankruptcies predominantly affected the construction industry (713), trade (632), and hospitality sector (594). Historically, these sectors represent the highest-risk categories for bankruptcies and are more sensitive to macroeconomic changes than other industries. On the other hand, the percentages reveal that the hospitality sector (0.71%), transportation and storage (0.47%), and the construction industry (0.39%) have relatively higher bankruptcy rates compared to the total number of businesses in those sectors.
In 2023, Altares Dun & Bradstreet recorded 2,343 bankruptcies in the trade sector, marking an increase of 5.16% compared to the previous year when the number stood at 2,228. In the construction industry, there were 2,495 bankruptcies in the past year, reflecting an 8.01% increase compared to the 2,310 in 2022. The hospitality sector witnessed 2,157 bankruptcies, signifying an 18.26% rise from the 1,824 bankruptcies in 2022.
Belgian companies, on average, pay 10 days overdue
In the last quarter of 2024, Belgian companies paid their invoices, on average, 9.64 days after the due date, indicating a slight improvement of 6.05% compared to the previous quarter. Although there is some variation in payment behavior, fluctuations have been minimal in recent years. This suggests that Belgian companies generally exhibit stable payment behavior, with payments occurring, on average, around ten days after the due date.
Challenges in 2024
"As an exporting nation, Belgium has an open economy, meaning that global economic developments also impact our country. For instance, a slowdown in the economies of countries like Germany or China would undoubtedly affect us. Simultaneously, we can benefit from growth in other trading partners, resulting in experiencing both less favorable and more positive influences. In this context, stability remains the guiding principle for the near future.
The growth of the Belgian GDP has remained reasonable, partly due to the automatic indexation of wages. However, historically, this has not been sufficient to curb the increase in the number of bankruptcies. While an increase in bankruptcies is anticipated, our trade intensity indicator currently does not suggest a repetition of the peak in bankruptcy risk as seen in 2012-2013," concludes Peeters.
