Creditreform on 9 January 2025 published its analysis of the trend in business bankruptcies in 2024. The report shows a sharp increase in business bankruptcies in 2024 compared with the previous year. “We are seeing a significant increase of 26.38%, with 1,193 bankruptcies recorded at 31 December,” notes Juan Santiago, authorised manager of Creditreform Luxembourg.
The sectors that were the most affected are construction and services, says Creditreform. In the case of construction, Creditreform refers to a certain “concern,” with an increase of 27.1% in bankruptcies, even though the sector had already suffered a 43.52% rise in bankruptcies in 2023. “These figures deserve our full attention. Among the large companies that have filed for bankruptcy are Maconlux Sàrl, Carvalho Constructions Générales Sàrl and Cenaro,” explains Santiago.
As for the services sector, it recorded even more bankruptcies: 693 in 2024, an increase of 39.44%. In this area of activity, the manufacturing and hospitality sectors suffered the most, with 17 bankruptcies in the former and 111 in the latter.
In its analysis, Creditreform also looks at the structure of companies and finds that the youngest businesses have not been the hardest hit. In fact, they were “relatively spared” compared with companies that had been in business for more than five years, which saw their insolvencies increase by 52.69% (compared with a fall in insolvencies of 11.6% for the youngest companies). As for their legal form, whether SARL, SARL-S or sociétés anonymes, all saw a rise in the number of bankruptcies (+26.18% for SARL and +21.46% for sociétés anonymes).
In terms of jobs, Creditreform was unable to provide us with the number of jobs directly affected. However, the national statistics bureau Statec reported a slight increase in salaried employment of around 1% over 12 months in 2024. On the other hand, in the construction sector, which has been hit by a number of bankruptcies, salaried employment has fallen by 5.2%.
Luxembourg is not an isolated case
Geographically, Creditreform notes that the judicial district of the capital is more affected (1,105 cases, an increase of 30.31%), compared with a fall in bankruptcies of 8.33% in the geographical area covered by the district of Diekirch.
This unfavourable trend does not only affect Luxembourg, but also affects businesses throughout the European Union. As a result, a large number of bankruptcies have been recorded in neighbouring countries. In France, the number of bankruptcies has even reached a record high, with more than 66,000 bankruptcies and 260,000 jobs affected. Over one year, this only represents an increase of 14.36%. But over the longer term, this represents the highest level in at least fifteen years, with an increase of 28% compared to 2019 and an increase of 137% compared to 2021. In Belgium too, according to Graydon Creditsafe, the number of bankruptcies is high, but to a lesser extent (+7.22%), which still represents 11,549 bankruptcies.
2025 will remain fragile
Creditreform points to a lasting crisis, particularly for the construction sector, which is likely to continue to suffer from business failures in 2025. “Although there were some signs of recovery in the third quarter of 2024, they will not be enough to overcome the challenges in 2025. More support will be needed to strengthen this essential branch of our economy. To stimulate the sector, it would certainly be useful for the government to speed up the process of completing the major construction projects that are planned,” says the specialist. Creditreform also expects an increase in bankruptcies in the services sector. “Luxembourg has now reached the pre-crisis average for 2019 in terms of total numbers, but the trend in insolvencies has evolved differently in the main economic sectors,” notes Santiago.
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