Corporate bankruptcies nationwide
7,773 corporate bankruptcies nationwide in 2020
Corporate bankruptcies fall to the fourth lowest number in 50 years; 792 bankruptcies were related to the COVID-19 pandemic
In 2020 (January–December), the total number of corporate bankruptcies (total liabilities of 100 thousand dollars or more) nationwide was 7,773 (down 7.2% vs. PY), and the total amount of liabilities was 11,749 million dollars (down 14.2% vs. PY).
As a result of a range of support measures implemented in response to the pandemic, the number of bankruptcies was lower than that seen in the same month of the previous year for six consecutive months from July onwards. Annually, the number of bankruptcies fell below the previous year for the first time since 2018, and went below 8,000 for the first time in 30 years.
In the 50 years since 1971, this was the fourth lowest level since 1989 (7,234), during the bubble economy.
Although the number of large bankruptcies with liabilities of 10 million dollars or more increased to 198 (vs. 185 in the previous year), the total amount of liabilities fell below the previous year's level due in part to the rebound from the 2019 bankruptcy of MT Picture Display Corp., reaching the fourth lowest level in the 50 years since 1971.
The number of bankruptcies with liabilities of less than 100 million yen was 5,925 (76.2% of the total, compared to 6,288 in the previous year), with no significant change in the trend of small-scale bankruptcies.
Bankruptcies related to the COVID-19 were 792 in total.
- Of the bankruptcies involving "labor shortages," 370 were due to "difficulty in finding successors" (compared with 270 in the previous year).
- Number of bankruptcies by prefecture: 19 prefectures showed a year-on-year increase, while 26 prefectures showed a decrease, with the prefectures showing a decrease exceeding those showing an increase for the first time in three years
- Number of bankruptcies by amount of liabilities: 198 large bankruptcies with liabilities of one billion yen or more; less than 200 for the third consecutive year
- Number of bankruptcies by industry: increased in the transport machinery and equipment manufacturing industry (20→46), accommodation industry (75→118) and restaurant industry (799→842).
- Number of bankruptcies by type: legal bankruptcies account for a record-high 95.9% of all cases
- Bankruptcies by number of employees: companies with less than ten employees account for 88.5%, the highest in 30 years
- Listed company bankruptcies: apparel retailer Renown Inc. (May, Tokyo; liabilities: 13 billion and 879 million yen; Civil Rehabilitation Law; TSE 1st Section) and digital media creation business Nuts Inc. (September, Tokyo; liabilities: 509 million yen; bankruptcy; JASDAQ).
- The percentage accounted for by SME bankruptcies (based on the Small and Medium Enterprise Basic Act) is 99.9%. This fell below 100.0% for the second year in a row
By industry, the service industry reported the most bankruptcies, with six out of ten industries reporting less bankruptcies than in the previous year
In 2020, six out of ten industries reported less bankruptcies than in the previous year.
The service industry and related industries, including the restaurant and accommodation business, were greatly affected by the loss of inbound demand and voluntary restrictions on movement caused by the pandemic. As a result, these industries had the largest number of bankruptcies at 2,596 — a 1.0% increase vs. PY and a year-on-year increase for the fifth consecutive year in a row.
The retail industry, on the other hand, which includes retailers of food and beverage products that benefited from "nesting" demand (that is, demand from people sheltering in place), only had 1,054 bankruptcies — a 14.3% decrease vs. PY, a year-on-year decrease for the third year in a row, and the lowest level in the 30 years since 1991.
Bankruptcies in the wholesale industry (1,065, down 6.8% vs. PY), the construction industry (1,247, down 13.6% vs. PY), the manufacturing industry (915, down 10.6% vs. PY), the transportation industry (227, down 10.6% vs. PY) and the information and communications industry (279, down 22.0% vs. PY) fell for the first time in two years.
On the other hand, bankruptcies increased for the second year in a row in the agriculture, forestry, fishing, and mining industries (109 bankruptcies, up by 26.7% vs. PY), and for the first time in four years in the finance and insurance industries (30 bankruptcies, up 25.0% vs. PY). In the real estate sector, the number of bankruptcies was 251, the same as the previous year.
By area, seven out of nine areas had less bankruptcies than in the previous year
By area, seven out of nine areas (that is, all areas except Hokuriku and Chugoku) had less bankruptcies than in the previous year in 2020. At 175 (down by 17.4% vs. PY), the number of bankruptcies in Hokkaido decreased for the third year in a row, reaching the lowest level in the 30 years since 1991. In Tohoku, bankruptcies decreased for the first time in three years at 355 (12.3% vs. PY). In Kanto, bankruptcies showed a year-on-year decrease for the first time in two years at 2,812 (down 9.6% vs. PY), falling under 3,000 for the first time since 1990 (2,307). In Chubu, bankruptcies decreased for the second consecutive year at 1,029 (0.8% vs. PY). In Kinki, bankruptcies showed a year-on-year decrease for the first time in two years at 2,063 (down 4.9% vs. PY), reaching the lowest level in 30 years. Shikoku (158 cases, down 17.7% vs. PY) and Kyushu (622 cases, down 11.3% vs. PY) saw the first decrease in three years. The only increase was seen in Chugoku, where the number of bankruptcies exceeded that of the previous year for the third year in a row (358, up 2.5% vs. PY). Out of ten industries, bankruptcies increased in four and decreased in five; the service industry, however, which includes lifestyle-related services and the entertainment industry (5 → 18 bankruptcies), drove the numbers up (118, up 24.2% vs. 95 in the previous year). Hokuriku was the only area reporting the same number of bankruptcies as in the previous year (201).
※Area scope is defined as follows.
- Tohoku (Aomori, Iwate, Miyagi, Akita, Yamagata, Fukushima)
- Kanto (Ibaraki, Tochigi, Gunma, Saitama, Chiba, Tokyo, Kanagawa, Niigata, Yamanashi)
- Chubu (Nagano, Gifu, Shizuoka, Aichi, Mie)
- Hokuriku (Toyama, Ishikawa, Fukui)
- Kinki (Shiga, Kyoto, Osaka, Hyogo, Nara, Wakayama)
- Chugoku (Hiroshima, Okayama, Yamaguchi, Tottori, Shimane)
- Shikoku (Kagawa, Tokushima, Ehime, Kochi)
- Kyushu (Fukuoka, Saga, Nagasaki, Kumamoto, Oita, Miyazaki, Kagoshima, Okinawa)