According to a Creditreform report released on Wednesday, 611 firms were declared bankrupt during the first six months of the year, up from 457 during the same period in 2017.

“Compared to neighbouring countries, the grand duchy is experiencing a worrying upward trend in bankruptcies,” company managing director Herbert Eberhard said, describing the increase as “alarming”.

Three quarters of the companies which collapsed were established five or more years ago, up from 64% in the first half of 2017. Bankruptcies are administrated by a court in Luxembourg and another in Diekirch, which handle firms in their locality.

The Luxembourg district court recorded the strongest growth in bankruptcies, up 43%, from 380 to 545. While the Diekirch district court saw a decline with 66, down from 77. Retail firms saw the biggest proportional increase of total bankruptcies with 137, up 36% from 101 in the same period the year before.

The proportion of bankruptcies in the building sector remained stable at 5% with 29 companies. The service sector accounted for the lion’s share of bankruptcies with 439 cases, making up 7 in 10 cases, but this rate remained stable. The production sector reported the lowest number of bankruptcies with six firms compared to zero at the start of 2017.

Creditreform concluded in its report that a stable economic situation in western Europe and low interest rates provided the basis for “sustained growth in Luxembourg.” It forecast a “slower growth in bankruptcies” in the second half of 2018.