Report from ABN Amro
Significantly fewer bankruptcies in the agricultural sector
The number of bankruptcies in the agricultural sector fell by 2017% in 34. In that year 'only' 31 agricultural companies went bankrupt. That number is historically low. ABN Amro reports.
The number of bankruptcies in the Netherlands fell by 25% in the past year, compared to 2016. Compared to the peak year of 2013, a decrease of 61% is visible. According to ABN Amro, the economic growth of recent years has mainly contributed to this decline. The bank expects that the number of bankruptcies will decrease by 5% to 10% in the coming year.
Agricultural sector
The number of bankruptcies in the agricultural sector was 2017% lower in 34 than in 2016. This is mainly due to the higher prices for dairy and meat products. ABN Amro expects the number of bankruptcies in the agricultural sector to stabilize in 2018.
However, there were also times when the agricultural sector struggled. Some examples of this are: the fipronil affair, the phosphate ceiling and the relatively late frost. This resulted in lower volumes delivered in 2017. The bank expects volume growth to increase by 2018% in 1.
ABN Amro also notes that the increase in scale in the agricultural sector has come to a standstill. The number of companies increased by 2017 companies in 545. The majority of these are sole proprietorships.
Other sectors
In addition to the agricultural sector, the retail trade and the leisure sector also stand out. These sectors show a decrease of 33% and 26% respectively, compared to 2016. The strong decrease in the number of bankruptcies in the leisure sector is the result of a turnover growth of hotels and restaurants, supported by an increase in the number of foreign tourists.
The only sectors where the number of bankruptcies increased last year are the food sector (+14%) and in the technology, media and telecom sector (+4%). This is mainly caused by the fact that more sole traders in the food industry went bankrupt.
The future
ABN Amro expects that there are 2 risks in the longer term that could influence the development of the number of bankruptcies: Brexit and a possible interest rate increase. "Brexit could pose a risk for companies from 2019 onwards if they do a lot of business with the United Kingdom. With an interest rate hike, companies with a weak financial position could run into problems if the financing turns out to be more expensive," said Madeline Buijs, sector economist at ABN Amro.
Kimberly Baker
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