1. Focusing on firms with a turnover exceeding EUR50mn, our Q3 2019 monitoring points to quarterly rebound in major insolvencies leading to a stable ytd number of major insolvencies (249 i.e. +1 case compared to Q3 2018). Based on their financials, we calculate that these insolvent companies represented a higher combined turnover of EUR145.2bn (+37% or +EUR39.1bn vs 2018). This suggests a worsening severity of major insolvencies, which could have serious effects on providers along supply chains.
  2. Regions posted uneven trends with North America experiencing an increase in major insolvencies (+23 cases compared to 2018 ytd figures), while Asia (-4 cases), Western Europe (-3) and Central & Eastern Europe (-14) recorded less. At the same time, Western Europe remained the main contributor to the global level of major insolvencies (104 cases compared to 64 for Asia and 51 for North America).
  3. Retail (37 insolvencies), Construction (33) and Services (27) were the most affected sectors in terms of the number of insolvencies for this period. Energy (+9), along with Metals (+5) and Services (+5), posted the strongest rise in insolvencies, while Machinery & Equipment (-13) saw a noticeable decline compared to the same period of 2018.
  4. Looking at the details, we find that as of Q3 the 2019 insolvency hot spots were Retail and Services in Western Europe; Construction in Asia and Energy and Retail in North America. These cases reflect a wide range of challenges (indebteness, input prices, overcapacity, digital disruption, cyclical exposure) and suggest more discrimination by risk managers.
  5. Looking at the last four quarters together, we see a stable number of major insolvencies with 336 cases in total as of Q3 2019,. The data also show an increasing severity to EUR197.3bn in cumulative turnover (+EUR69.3bn  i.e. +54% y/y).  North America posted a significant increase (+25 cases compared to +1 for Asia, + 3 for Latin America, but -16 for Central & Eastern Europe and -5 for Western Europe). Yet, Western Europe registered the highest number of major insolvencies (139). Construction (52 insolvencies), Retail (49) and Services (37) were the most affected sectors in terms of number of insolvencies. Machinery/Equipment (-15) and Household equipment (-6) registered a noticeable decline, while Energy (+12) and Construction (+6) posted the strongest increase .