On top of this higher number of insolvencies, we identify a persistent high level of failures of large companies – those with over EUR50mn of turnover - with 249 major insolvencies totaling more than EUR145bn in turnover in Q1-Q3 2019. The hot spots were construction in Asia; energy and retail in North America and retail and services in Western Europe.

In 2020, business failures are set to rise for the fourth consecutive year (+6% y/y). The combination of a low-for-longer pace of economic momentum, notably in advanced economies and in the industrial sector, and the lagging effects of trade disputes, political uncertainties and social tensions, will keep companies under pressure.  

 While the easing of global monetary and financial conditions will help, increased price competition and higher salaries will limit margins and translate into additional woes for a higher number of companies in a majority of countries. 

Asia will be the key contributor to the rise in insolvencies (+8% y/y) in 2020, notably due to China (+10%) and India (+11%). Western Europe, where economic growth will remain below the historical threshold which usually stabilizes the number of insolvencies (+1.7%), will see an increase in most countries, but the latter would be moderate, notably in Germany (+3%), Italy (+4%) and Spain (+5%), as well as the UK (+3%).

All in all, four out of five countries will post a rise in insolvencies in 2020, with Brazil (-3% y/y) and France (0%) as the key exceptions. As a result, one out of two countries will register more insolvencies in 2020 than before the financial crisis.