In the second quarter of 2023, the number of bankruptcy declarations of EU businesses increased for the sixth quarter in a row. Compared with the previous quarter, the number of bankruptcies was up by 8.4% and thus reached the highest level since the start of the data collection in 2015, according to information published by Eurostat. Meanwhile in Cyprus there was a 48.5% drop in bankruptcies in the second quarter of the year compared with the previous quarter. However, there were significant ups and downs during the last six quarters according to Eurostat’s estimates.

The estimates for Cyprus show an increase by 4.5% in bankruptcy declarations during the first quarter of 2022 compared to the previous quarter, followed by a 175% increase in the second quarter of 2022, a 33.5% drop in the third quarter of 2022, a 12.7% drop in the fourth quarter of 2022, an increase of 109.7% in the first quarter of 2023 and a 48.5% drop in the second quarter of 2023.

When it comes to registrations of new businesses in the EU, in the second quarter of 2023 there was a slight decrease by 0.6% compared with the previous quarter, following an increase of 2% in the first quarter of the year. Generally, since 2023, the number of business registrations has been higher than during the 2015 - 2022 period.

The information published by Eurostat does not include data on registrations of new businesses in Cyprus.

Looking specifically at bankruptcies by activity, all sectors of the economy in the EU registered increases in the number of bankruptcies in the second quarter of 2023 compared with the previous quarter. Meanwhile the trends in Cyprus were less clear.

In the EU, the sectors with the highest increases in the number of bankruptcies in the second quarter of 2023 compared with the previous quarter were accommodation and food services (+23.9%), transportation and storage (+15.2%), and education, health and social activities (+10.1%).

Compared with the pre-pandemic fourth quarter of 2019, the number of declarations of bankruptcies in the second quarter of 2023 was higher in the majority of sectors of the economy. The largest increases in the number of bankruptcies, compared with the fourth quarter of 2019, were recorded in accommodation and food services (+82.5% and transportation and storage (+56.7%).

In contrast, in the second quarter of 2023, there were only two sectors of the economy where the number of declarations of bankruptcies was lower than in the pre-pandemic fourth quarter of 2019: industry (-11.5%) and construction (-2.7%).

On Cyprus, Eurostat published estimates that were not complete for the entire period covered. The data that is available for the last six quarters show a reduction of bankruptcies in construction by 50% during the second quarter of 2023, compared to the previous quarter, after an increase of 33.2% during the first quarter. The data also shows a gradual reduction of bankruptcies in the sector of financial and insurance services after having increased significantly in the second quarter of 2022.