27 Jul NYT Echoes European Predictions: A Rising Wave of Bankruptcies
July 15’s “Deal Book” (hosted by the New York Times) offered a fresh prediction by Dunn & Bradstreet of a rising wave of bankruptcies late this year. According to Deal Book:
The United States will be hardest hit, according to D&B’s prognosis, with bankruptcies increasing by 60 percent, but European nations will hardly go untouched. Experts foresaw an increase of insolvent companies of 43 percent in Spain, 35 percent in the United Kingdom and 28 percent in France. In Germany, the rise in bankruptcies is expected to be more limited, at 17 percent, similar to the 16 percent predicted for Japan . . . . [H]ardest hit will be markets tied to industries already ravaged by bankruptcies, like the automotive sector, as well as small to midsize companies in retail and cottage industries. Such companies have suffered from a drastic drop in orders, and the financial problems that follow. The [German newspaper] Handelsblatt called it a vicious circle: the need that companies have for fresh capital, as their cash flow dwindles, is the very thing that scares off lenders.