Silence before the Bankruptcy Storm - Belgian Economy remains Steadfast

Reading time 5 minutes | Written by Shirley Chih | November 6, 2023

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Brussels, November 7, 2023 – The relative intensity with which Belgian companies engaged in trade increased by 4.9% in the third quarter of 2023 compared to the previous quarter. This is evident after an analysis by Altares Dun & Bradstreet. The business data specialist observed that the Belgian economy landed at 85.5 points in the third quarter, compared to Q2 2023, when the trade intensity was still at 80.6.

Compared to the previous quarter, we see increases in trade intensity in all sectors. Especially in the retail sector (+6.8), wholesale (+6.2), services (+5.6%), and restaurants and cafes (+5.4%), we can observe that companies engaged in trade more intensively.

Fewer bankruptcies in the third quarter

In the third quarter, we observe a decrease in the number of bankruptcies. A total of 2,343 bankruptcies were recorded, which represents a decrease of 25.9% compared to the previous quarter when there were 3,164 bankruptcies. However, the bankruptcy figure generally remains higher than that of the same period a year earlier when only 2,010 bankruptcies were recorded.

This quarter, the highest relative number of bankruptcies occurred in the regions of Antwerp (16.85%), the Brussels-Capital Region (14.40%), and Liège (8.34%). The number of bankruptcies had been on a significant rise in Flanders in recent times but now appears to be stabilizing. Joris Peeters, Chief Data Scientist at Altares Dun & Bradstreet, emphasizes: "Since 2008, the number of companies in Belgium has steadily increased. This is a crucial factor to consider when analyzing bankruptcies. When we compare the number of bankruptcies to the total number of companies, it becomes clear that the likelihood of bankruptcy is still historically relatively low."

When we specifically look at the sectors where most bankruptcies occurred, it turns out that the construction industry (512), trade (476), and hospitality (428) are the leading sectors. The most significant impact, relative to the size of the respective sectors, was observed in the hospitality sector (0.58%), transportation and storage (0.46%), and the construction industry (0.32%). According to Peeters, historically, there have always been relatively many bankruptcies in these sectors. Now, they face additional challenges: the hospitality industry is struggling with a labor shortage, while the construction and transportation sectors are dealing with rising inflation. Furthermore, both sectors have strongly felt the consequences of the energy crisis.

Belgian payment behavior remains stable

In the third quarter, Belgian companies paid their invoices on average 10.27 days after the due date, which is a slight improvement of 3.7% compared to the previous quarter. In comparison to a year ago, when the average payment period was 10.54 days, we also see a positive trend. While there is some variation in payment behavior, fluctuations have been minimal in recent years. This suggests that, overall, Belgian companies exhibit stable payment behavior.

The bankruptcy storm remains absent for now

When we compare the bankruptcy figures to the Gross National Product (GNP), it appears that the situation is slowly returning to the level before the COVID-19 pandemic. Peeters emphasizes, "The Belgian economy has proven to be quite resilient to recent macroeconomic shocks. Based on the data from the third quarter, we currently see no indications of an explosive increase in bankruptcies. However, we must remain vigilant, as sudden increases in energy prices, for example due to a harsh winter or new geopolitical events involving Israel-Palestine and Russia-Ukraine, could quickly disrupt this stable picture. The fourth quarter may present a very different picture in that regard."

View the full report here.

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Shirley Chih

Marketing & Communications Officer

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