- 2026 marks the fourth consecutive year of rising global business insolvencies, with a moderately slowing pace. Our Global Insolvency Index looks set to increase by +5% this year (broadly in line with our previous estimate), down from +6% in 2025 and +10% in 2024, leaving it 21% above its pre-pandemic average. North America and Asia-Pacific now drive 79% of the global increase. The US is the main engine, accelerating to +12% (from +7% last year), while Canada keeps declining (-3%). Asia-Pacific contributes 28% of the headline rise, driven by Taiwan (+36%), South Korea (+12%) and Japan (+6%), though China is near-stabilizing at +1%. Western Europe adds 15% to the global increase: +4% regionally, led by Germany (+8%) and France (+3%), with five countries - including France (about 71,000 cases), Switzerland (15,000) and Australia (11,850) - reaching their highest levels since 2000. Overall, 24 of 44 monitored countries see rising insolvencies, and 30 now exceed their pre-pandemic averages.
- Large companies keep on failing at a record rate. Through the first three quarters of 2026, 376 firms with turnover above EUR50mn have gone insolvent, more than one every 18 hours. That’s a record that surpasses the 2024 peak by 38 cases. Retail (69 cases), services (62) and construction (51) bear the brunt, accounting for nearly half of the total. Western Europe alone registers 229 major cases. Agrifood, automotive, transportation and energy show particularly sharp relative increases across the continent. Looking at companies of all sizes together, there are some signs of softening in Europe: Only 43% of 216 monitored sectors posted year-on-year rises in Q2, down from over 60% on average through 2024. But construction, transport and B2C services remain the most broadly affected.
- The jobs cost is significant: roughly 2.7mn jobs are directly at risk worldwide in each year over 2026-2027, up 180,000 from 2025 and a 13-year high in both Europe and North America. This includes 2.3mn jobs at risk due to companies being liquidated in and 0.4mn due to restructuring. Europe accounts for 1.6mn, with France (about 268,000), Germany (239,000) and the UK (213,000) first in line, followed by North America at 650,000 and Asia at 305,000. To put this in perspective, the jobs at risk represent 8% of the unemployed in the US and 6% in Europe, but the picture varies enormously by country, from just 1% in Spain versus 10% in both France and the UK. Construction, retail and services are again the most exposed sectors.
- We do not expect a meaningful decline in business insolvencies anytime soon. Our headline index is forecast to edge up by +1% in 2027 (+1pp compared to our previous estimate) before dipping just -1% in 2028. 2028 will be mark the first year without a meaningful increase since 2022 but it is hardly a recovery. The index would still sit 22% above pre-pandemic norms, driven by several structural forces. With enduring tensions in the Middle East, global GDP growth is expected to underperform compared to the 2023-2025 period, while energy costs remain high and governments offer limited fiscal support. Moreover, the stock of active firms expanded by roughly 10% between 2021 and 2025, broadening the pool of companies exposed to failure – fewer than half of young companies survive five years in Europe. Construction, accounting for 15-20% of national insolvency counts, also continues to drag on the outlook. Regional trajectories will continue to diverge: the US (+4%) and Asia-Pacific (+2%) will continue climbing, while Western Europe edges down (-1%), with Germany flat at a high level (about 25,900 cases), France still inching up (+1%, 71,400 cases) and the UK declining by -3% (24,800 cases).
- Higher-for-longer interest rates are choking the most vulnerable firms. Persistent interest rates keep straining (re)financing issues for already fragile companies, notably SMEs and those in already high-risk sectors such as in Latin America and Western Europe. In the US, fewer than one in two SMEs is profitable; in Europe, small firms are more likely than large ones to report falling earnings. Relief will be scarce: 60% of countries will maintain higher policy rates in 2027 than in the prior 12 to 24 months, inflating funding costs and squeezing margins. Already, 16% of US sectors and 25% of European ones have an interest coverage ratio below 3 and a shock of 400bps in the US or 300bps in Europe would push the rest under. In Western Europe, a +100bps rise in bank lending rates adds between EUR6bn (Spain) and EUR10bn (Italy and France) in interest expenses, compressing margins by -0.3pp to -0.9pp of gross value added (-0.3pp in Germany, -0.5pp in the UK, -0.6pp in Spain and -0.7pp in France).
- Higher-for-longer energy costs also maintain the pressure on margins. The 60% rise in energy costs since January 2026 has hit transportation hardest, with net margins falling by about -17pps in air transport (US and Europe) and by -15 pps (US) and -10pps (Europe) in road transportation. Energy-intensive European industries would suffer more than their US peers, notably chemicals (-4pps vs. -2pps) and metals & mining (-3pps vs. -2pps). Other sectors, including agriculture, retail, pharma and construction, would see more limited losses of -1 to -3pps. These figures are an upper bound since firms will try to compensate by reviewing pricing strategies (selling prices, suppliers terms), implementing cost-cutting and/or optimizing internal operations to improve efficiency.
- AI Darwinism is not yet a visible driver of insolvencies at the macro level, but there are some signals coming from smaller markets and early adopter sectors. An initial analysis across eight EU economies and nine sectors finds very low correlation between AI adoption rates and insolvencies at this early stage. Macro and sector-specific fundamentals still dominate. However, AI adoption can accelerate business insolvencies in smaller and less diversified markets due to the competitive wedge it creates between early adopters and laggards. Belgium and Sweden, which have the highest average AI adoption (~35%), show a clear positive link between AI intensity and worsening insolvency trends. This suggests that in smaller and less diversified economies, AI could act as a competitive accelerator, reinforcing some firms positions while intensifying pressure for non-adopters. Information & communication, the most AI-intensive sector with 70% adoption, could be the canary in the coal mine: it shows worse insolvency performance than the national average in five of eight countries surveyed.