The level of business failures remains very high in the first quarter of 1, but the construction industry is holding up with several activities in the green

By the end of March 2024, the number of proceedings had jumped by another 29% and had exploded by 53% by the end of March 2023. For the past six months, the volume of bankruptcies over a rolling 6 months has stabilized at around 12. A plateau that suggests the possibility of a decline in bankruptcies.

The toll remains very high for the largest SMEs and mid-caps, bringing the number of jobs at risk to 71.000, the highest level since the 2009 financial crisis (73.000).

• 17.845 insolvencies in Q1 2025, a level well above the 1-year Q15 average (15.300).
• March fell back below the 68.000 procedure mark over 12 months, just exceeded in January and February.
• 64 SMEs with more than 100 employees went bankrupt this quarter (+28%)...
• …1 in 5 operates in the social or medical sector.
• The number of jobs at risk has soared to 71.000, a level never seen since the 2009 crisis.
• Agriculture, IT services and catering are struggling.
• Sharp rise in defaults in Pays-de-la-Loire and Corsica.

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• The increase in the number of defaults (+4,4%) is the lowest in 4 years.
• SMEs with 20 to 100 employees are breathing (-6%).
• The building is holding up, the business is going green.
• The Centre-Val-de-Loire and Provence-Alpes-Côte-d'Azur regions are showing significant improvement.

For Thierry Millon, Director of Altares Studies: "This first quarter has not yet seen a decline in the number of business failures, but the storm is moving away, even if persistent clouds encourage us to remain cautious and patient. As expected, the number of business failures has been contained for the past six months, at around 68.000. This stability has been driven at the start of the year by the smallest businesses with fewer than three employees. The largest, with over 3 employees, have experienced a sharp decline, which is weighing heavily on employment. Although the overall figure remains very high, several activities are turning green, particularly in the B100C sector. This is particularly the case for the retail clothing trade (-2%) and, in its wake, the wholesale textile and clothing trade (-15%) and its manufacturing (-19%). The restaurant industry, on the other hand, is struggling to break out of its rut. B22B is trying to resist in the manufacturing industry but is struggling more in the services sector."

17.845 bankruptcies in the first quarter, a number still at its highest

17 companies went bankrupt between January 845 and March 1, 31, an increase of 2025% compared to the same period in 4,4. This year again, the volume of bankruptcies has not yet significantly deviated from the 2024 defaults, a historic peak reached in 18.000. We remain well above the average number of defaults observed in the first quarter for the past 2015 years (1 on average).

With 373 judgments recorded this quarter, the number of safeguard proceedings is up 6,9%. Judicial recovery proceedings (JR) are up rapidly by 7% with 5.077 judgments issued.

Meanwhile, liquidation orders (LJ) are increasing less rapidly (+3,3%). 12.395 LJ orders were issued, representing 69,5% of all proceedings. This rate of direct liquidations is returning to its traditional values ​​after approaching 80% during the Covid period.

An improvement driven by microenterprises, while large SMEs and mid-caps are still suffering

Microenterprises with fewer than three employees account for the majority of defaults (3%). This quarter, 72 of them went bankrupt, a number that increased by only 12.867%.

3.507 small businesses with 3 to 9 employees went bankrupt at the start of the year, an increase of 8,8%.

SMEs with 10 to 99 employees are holding up much better: 1.407 of them have gone bankrupt compared to 1.394 a year ago, representing near stability (+0,9%).

On the other hand, the situation remains very difficult for SMEs and mid-sized companies with more than 100 employees: 64 structures failed during this first quarter, 28% more than a year earlier. 14 of these failures are in the social (home help, social action) or medical (hospital activities) sectors.

This fragility of the largest SMEs weighs on the overall employment threat: 71.400 jobs are affected, a level never seen before for a Q1 since the financial crisis of 2009. There were 73.700 at that time.

Consumer activities are doing well, construction is holding up but business services are still struggling

Retail and wholesale are going green

Retailers were able to breathe a sigh of relief at the start of the year. Retail sales (2.131; -4%) and business-to-business (735; -3%) showed significant improvements across many sectors. The number of stores in default fell by 15%, supporting the activity of textile and clothing wholesalers (-19%) and manufacturing (-22%).

The DIY and home improvement trade is slightly in the green (-1%), far from the surge in defects recorded a year earlier (+62%). This performance is driven by furniture, which is finally holding up after long months of pressure.

The trend is also difficult on the vehicle sales & repair side (+8%).

Construction is holding up with several activities in the green

Affected by the real estate crisis for several quarters, the construction sector (+2%) is showing signs of rebound in some branches at the start of this year.

This is the case for construction. The second work is still slightly deteriorating (+2%) despite an improvement in electrical installation work (-3%) which does not compensate for the poor trend observed particularly in plastering (+17%).

The structural work is balanced thanks to a good performance in the construction of individual houses (-14%) while general masonry remains in the red (+5%).

Real estate development remains fragile (+21%), but these are more likely to be failures of program support than of real estate development players. Illustrating the emerging calm in the real estate market, the number of real estate agency defaults has fallen by 17% after reaching its highest level since the summer of 2024 in 2009.

On the other hand, a point of tension is observed in public works where failures increase by 13%.

In B2B, business services are struggling, manufacturing is holding up

In business services (+8%), private security slipped by 40%, IT services by 24%, communications and management consulting by 20% and building cleaning by 14%.

The manufacturing industry (+5%) is close to the overall trend (+4%). This trend masks significant disparities. The number of defects is soaring in the wood and building materials sector (+28%) and even more so in the energy, water, and environment sector (+70%), particularly waste recovery. In metallurgy and mechanics (+11%), industrial mechanics is holding back the increase in failures. Conversely, in addition to textile and clothing manufacturing (-22%), printing is also in the black (-10%), as are maintenance activities (-9%).

Transportation is on a better trajectory this first quarter. Road freight is in the green (-4%), driven by intercity freight (-14%), while local freight is struggling more (+10%). Road passenger transport is less favorable (+20%), particularly for taxis (+21%).

Without giving in to panic, we will have to closely monitor market tectonics.

For Thierry Millon: "In an already complicated political, economic, and geopolitical context, the American president's announcements further cloud the economic outlook. While it is too early to precisely measure the effects, the fact remains that this trade war will force leaders to adjust their revenue, investment, employment, and therefore financial performance forecasts. The supply chain will be challenged and cash flow will be under heavy strain. Cash management had seemed obvious since Covid and the rise in interest rates, but we will have to redouble our efforts on this issue to maintain and secure growth. For several months, the volume of defaults has stabilized at a very high level; this is also the case for late payments calculated by Altares, which, after rapidly increasing by 2 days in 2024, seemed likely to remain around 14 days. A gradual decline in late payments and suspensions was therefore conceivable for 2025. But without completely giving up this hope yet, the international context is changing the situation. "BXNUMXB commercial risk, like country risk, is rising to the top of the pile. At the same time, it will be necessary to find new, reliable business partners to compensate for the possible loss of certain contracts. This market tectonics could then increase competition, make purchases more expensive, and degrade margins."

The full study “Business Failures and Safeguards – 1st Quarter 2025” is available online in by clicking here.

Methodology : Altares business failure statistics include all legal entities with a SIREN number (sole proprietorships, liberal professions, companies, associations) and having been the subject of a judgment to initiate proceedings pronounced by a Commercial or Judicial Court (ex TGI - TI)

Glossary: Business failure refers to the opening of a safeguard, receivership, or direct liquidation procedure before a Commercial or Judicial Court. This also applies to openings after the resolution of the recovery plan. However, the bankruptcy statistics do not consider amicable procedures (ad hoc mandate or conciliation) or the consequences of opening (plan termination or conversion into liquidation).

Illustrative image of the article via Depositphotos.com.