Fukuoka Prefecture experienced over 240 corporate bankruptcies from January to June 2024, marking a 34% rise compared to the same period last year. This number surpasses the 230 bankruptcies recorded in the first half of 2009, during the aftermath of the Lehman Brothers collapse. The service industry was the most affected, with 70 bankruptcies, followed by the construction industry with 58, and the retail industry, including restaurants, with 44 bankruptcies.
Several factors contributed to this surge in bankruptcies. Increased raw material costs and labor shortages put significant pressure on business operations. Additionally, companies began to face repayment pressures from the interest-free loans provided during the COVID-19 pandemic, known as Zero-Zero Loans. The total debt from these bankruptcies amounted to ¥42.2 billion, reflecting a 58% increase from the previous year.
The Teikoku Databank warns that the rising costs are not being adequately passed on to customers, leading to financial strain on businesses. Without proper price adjustments, the number of bankruptcies could continue to rise. The current economic challenges underscore the need for businesses to adapt to changing market conditions to avoid further financial difficulties. Source: Teikoku Databank
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