Spanish Bankruptcies at Record Level in 2013
There were a record number of business bankruptcy filings in Spain in 2013, according to data from the Instituto Nacional de Estadistica (INE). The Spanish construction industry in particular continues to suffer fallout from the property market crash of 2008 after a decade-long boom.
The number of household and business bankruptcy filings rose by 6.5% to 9,660 last year, the INE reported. This was despite Spain’s economy, fourth-largest in the eurozone, edging back into growth in the second half of 2013 after a double-dip recession. However, the national unemployment rate remains at 26%.
There was some indication that the business sector’s decline could be steadying, as bankruptcy filings rose at a slower pace last year following a 15.1% increase in 2011 and a 32.2% jump in 2012. Nonetheless, the number of bankruptcy filings remains at historically high levels. At the height of the boom in 2007, for example, there were only 1,147 bankruptcy filings overall.
In 2013, businesses suffered more than individuals, the data showed, with bankruptcy filings by companies surging 10.4% to 8,934 while those by households dropped by 25.6% to 726. The construction industry was hit hardest, representing 26.6% of all corporate bankruptcy filings.
Among major corporate names to file for bankruptcy last year was frozen fish giant Pescanova with a 10,000-strong workforce and household product manufacturer Fagor, which had 2,000 employees in Spain.
While bankruptcy proceedings aim to enable Spain’s debt-laden businesses to restructure and emerge as viable enterprises, 94% of filings end in liquidation, according to brokerage Axesor. The small business federation ATA Spain estimates that nearly half a million small businesses have gone into liquidation since the start of the financial crisis.