20 percent more business closures in 2020

In 2020, the number of enterprise deaths rose for the third consecutive year. As the number of company births was higher than ever and the number of bankruptcies very low, the total number of companies increased last year.

Mainly more business closures in second half of 2020

The number of enterprise deaths is over 25 percent higher than in 2019 and also the highest number since 2007. The increase is mainly visible in the third and fourth quarters of 2020. Relative to the enterprise population in every fourth quarter, the share of business closures rose from 5.9 percent in 2018 to 7.4 percent in 2020.

More closures in specialised business services

More than 40 percent of the increase in company dissolutions can be attributed to specialised business services (over 10 thousand more than in 2019). This is also the sector in which most companies are active. The sectors trade (+3.5 thousand) and information and communication (+2.8 thousand) recorded a year-on-year increase as well.

Twenty-four percent of the enterprise deaths in 2020 were found in specialised business services, while the share of this sector in the enterprise population in Q4 2020 amounted to 20 percent. The share of dissolved trading companies stood at 16 percent; this sector occupied a share of 13 percent in the enterprise population.

Dissolutions of companies with more than one person

Nearly 89 percent of company dissolutions concerned businesses with 1 person employed, more than 10 percent concerned businesses with 2 to 9 persons employed and less than 1 percent were businesses with 10 to 249 persons employed. Furthermore, the rise in dissolutions was mainly seen among companies with 1 person employed (+25.3 thousand). Among companies with 2 to 9 persons employed, the number was even slightly lower than in 2019, at 14.7 thousand. Enterprises with 10 to 249 persons employed recorded 1.1 thousand dissolutions, 250 (32 percent) more than in 2019.

470 restaurants dissolved

In 2020, the majority of dissolutions of companies with more than 1 person employed were seen among restaurants, namely 470. This is approximately 10 percent more than one year previously. There were also 450 dissolutions among cafeterias, lunchrooms, snack bars, ice-cream parlours and food stalls. The branches with the highest number of dissolutions of companies with more than 1 person employed include relatively many hotels and restaurants, but also online retailers, in third and sixth place. Although cafés were also listed in the top 10 last year, the number of closures of businesses with more than 1 person employed in this sector is not very different from previous years.