A new study by debt collecting agency Creditreform has revealed that there has been a wave of business failures in Switzerland in the last 10 months. The number of firms filing for bankruptcy has risen by over 30 percent, with the number of people starting a new business in Switzerland declining.

Company insolvencies in Switzerland increase by 35 percent

According to Creditreform, reported in Blick, 5.500 companies in Switzerland went bankrupt between January and October 2022, an increase of 35 percent compared with the same period in 2021. By the end of the year, the agency expects 6.600 companies to file for bankruptcy, 1.500 more than last year.

The agency explained that the end of COVID-era business incentives and tax relief led to the significant rise in insolvencies. Experts told Blick that many of the defunct businesses were already in financial jeopardy before the pandemic and that the economic relief given by the government only delayed the inevitable job losses and insolvency. This, coupled with fears of an economic downturn and sky-high running costs, has meant the number of insolvencies was 8 percent higher than the two years before the pandemic.

IT and finance industries in Zug and Lucerne most affected

Mechanical engineering, IT, banking, finance and insurance providers were the areas hardest hit. The biggest rises in insolvency compared with last year were found in Canton Zug (63,1 percent), Lucerne (47,3) and Schwyz (32,6). However, it wasn’t all bad news, with the number of bankruptcies in Valais, Geneva, St. Gallen and Graubünden all falling by between 12 and 23 percent.

Alongside the increase in business failures, the number of new entrepreneurs has also fallen, with 1,2 percent fewer company registrations in the first 10 months of 2022 compared with last year. However, this does not mean that Switzerland will start to offer fewer jobs: by the end of 2022, Creditreform expects that 49.000 new companies will have been created in the alpine nation.