In fiscal 2023, the number of corporate bankruptcies with liabilities of at least ¥10 million rose by 31.5% from the previous year to a record high of 9,053, surpassing 9,000 for the first time in nine years, according to a survey by Tokyo Shoko Research released on Monday.
During the year ending in March, bankruptcies were predominantly seen among small and midsize companies, which struggled to increase prices to offset rising material and other costs. Labor shortages were also identified as contributing factors to the increase in bankruptcies.
There was a 14.3% rise in the number of companies that collapsed after utilizing a COVID-19 relief program offering low-interest and collateral-free loans, reaching a record high of 622. Bankruptcies due to escalating prices increased by 1.7 times, totaling 684 cases. All ten industry sectors surveyed reported a higher number of bankruptcies for the second consecutive year.
The construction sector, grappling with elevated labor and material expenses, saw bankruptcies spike by 39.4% to 1,777. The service sector reported 3,028 bankruptcies, marking a 34.8% increase. Bankruptcies in the transportation sector rose by 25.6% to 441, reflecting issues with driver shortages and rising fuel costs, also known as the “2024 problem.”
The total liabilities from failed companies expanded by 5.9% to ¥2.463 trillion, surpassing ¥2 trillion for the second year in a row. In March alone, bankruptcies surged by
