Luxembourg Construction Sector: Rise in Bankruptcies and Economic Impact

2024-01-10 16:33:33

Published10. January 2024, 5:33 p.m.

In Luxembourg: The number of bankruptcies explodes in construction

LUXEMBOURG – If, overall, the number of bankruptcies decreased in the Grand Duchy in 2023, it increased considerably in the construction sector, according to figures published Wednesday by Creditreform.

The construction sector is suffering.

Vincent Lescaut/The essential

We know that construction is doing badly, and the bankruptcies figures in 2023 confirm it. Thus, all sectors combined, the Grand Duchy experienced 944 bankruptcies last year, a drop of 6% compared to 2022, according to figures published this Wednesday by Creditreform Luxembourg. To compare, France recorded an increase of 34.4%, Germany of 23.5% and Belgium of 9.65%.

Despite these encouraging figures for the Luxembourg economy, the construction industry is still suffering a lot, with 155 bankruptcies in 2023, 34.78% more than the previous year. The sector called on the government for help last year as high interest rates severely dampened the property market. Several bankruptcies of major companies have also been recorded, such as Cenaro Group and Manuel Cardoso.

More bankruptcies in 2024?

But, despite this significant increase, the construction sector is not where bankruptcies are most numerous. The vast “service” sector thus experienced 497 bankruptcies last year, significantly fewer than the 571 in 2022. Furthermore, Creditreform underlines that 177 businesses closed the curtain definitively in 2023, compared to 195 in 2022. The manufacturing industry experienced 9 bankruptcies in 2023, compared to 14 the year before. Finally, 111 establishments in the Horeca sector closed their doors last year, 4.50% less than the year before.

For this year, Creditreform Luxembourg says it expects an increase in the number of bankruptcies, Luxembourg having not returned to its pre-Covid level. In 2018 and 2019, the country experienced 1,229 bankruptcies per year.

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(jw)

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