Corporate bankruptcies up 14.2% in July

Jiji Press TOKYO (Jiji Press) — The number of corporate bankruptcies in July rose 14.2 percent from a year before to 802, up for the second consecutive month, Tokyo Shoko Research Ltd. said Thursday. It is the first time since May 2017 for monthly bankruptcies to rise 10 percent or more. It is also the first time since then that the number of bankruptcies has topped 800.

Sluggish sales and a shortage of labor were behind the increase, which the credit research company said shifted the state of corporate failures from having “bottomed-out” to being “on the rise.”

Bankruptcies rose in nine of the 10 industrial sectors covered in the survey. The increase was most evident in the service, retail and transportation sectors, all of which suffered greatly from labor shortages.

Meanwhile, total liabilities left by failed companies fell 17.1 percent to ¥93.4 billion, down for the second straight month, as small-scale bankruptcies involving debts of less than ¥100 million accounted for much of the total.

Citing causes for concern such as the planned October consumption tax hike and the strong yen, Tokyo Shoko Research said that “the potential is rising for an increase [in bankruptcies], especially among small companies that have failed to improve business.”Speech

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