In 2023, the number of corporate bankruptcies with liabilities of at least ¥10 million increased by 31.5% from the previous year to a record high of 9,053, according to a survey by Tokyo Shoko Research released on Monday.
The construction sector saw the highest increase in bankruptcies, with a 39.4% spike to 1,777 cases. The service sector reported 3,028 bankruptcies, marking a 34.8% increase.
The transportation sector also experienced an increase in bankruptcies due to driver shortages and rising fuel costs known as the “2024 problem,” with a 25.6% rise to 441 cases.
During the year ending in March, bankruptcies were predominantly seen among small and midsize companies that struggled to increase prices due to rising material and other costs. Labor shortages were also identified as contributing factors to the increase in bankruptcies.
There was a 14.3% rise in the number of companies that collapsed after utilizing a COVID-19 relief program offering low-interest and collateral-free loans, reaching a record high of 622 cases. All ten industry sectors surveyed reported a higher number of bankruptcies for the second consecutive year.
The total liabilities from failed companies expanded by 5.9% to ¥2.463 trillion, surpassing ¥2 trillion for the second year in a row. In March alone, bankruptcies surged by 11.9% to 906, with liabilities amounting to ¥142
