Business failures in France reached a “
historically low
” level in July, due to regulatory measures and aid to businesses in the face of the pandemic, the Banque de France reported on Wednesday.
The number of defaults fell to 27,896 over the 12-month period ending in July, according to a provisional tally, 27.6% less than a year earlier and almost half as much (-47.9%) than in July 2019.
Read also: French banks driven by the recovery of the economy and the decline in business failures
The decline can be observed in almost all sectors, "
including those most affected by restrictive measures linked to the health situation
" such as accommodation and food services, where the drop reached 41.9% over one year or trade. (-30.4% over one year). Only real estate activities recorded an increase of 1.9% in insolvencies over one year, but with a decrease in insolvencies of 23.8% over two years.
Since the start of the health crisis, the decline in defaults has been linked, on the one hand, to a temporary modification of the "
dates for characterization and declaration of the state of insolvency
" and, on the other hand, to "
support measures which provide cash flow aid or allow companies to reduce or delay the payment of certain charges,
”explains the Banque de France.
685,000 state-guaranteed loans distributed since March 2020
More than 685,000 state-guaranteed loans have notably been distributed since March 2020 for a total amount of nearly 140 billion euros, according to the Ministry of the Economy. The decrease in defaults measured over one year is slightly less than that observed in June, but this is due to a "
base effect
", the decline in these defaults having started in spring 2020 with the health crisis, notes the central bank.
"
This base effect phenomenon should increase in the coming months with the gradual taking into account, in the basis for calculating variations, of the following months of 2020
", according to the press release.
For the 12 months ending in July, the decline concerns all sizes of companies, including the largest for which it is however limited to 14%, with 37 insolvencies.
Read also: Business failures continue to decline in June according to the Banque de France
The insolvencies of large groups and mid-size companies (ETI) are however up 42.3% over two years.
Conversely, those of microenterprises fell by almost half (-48.2%) over the same period.
