Businesses, insolvencies rise in 80% of advanced economies
According to the Coface Observatory, Italy is the only one in Western Europe with a "high" risk, while Norway, Denmark and Switzerland are the most virtuous. The steel sector is going through a serious crisis at global level
2' min read
2' min read
(Il Sole 24 Ore Radiocor) - The first months of this year have seen an increase in corporate insolvencies in about eight out of ten advanced economies. Italy is the only country in Western Europe with an overall "high" level of business insolvency risk, albeit slightly. The construction, textile-clothing, automotive and metal sectors continue to have a 'very high' risk, while energy and pharmaceuticals have a 'low' level of risk. This is what emerges from the 'Country and Sector Risk Barometer' produced by Coface which provides an overview of companies' insolvency risk assessments in over 160 countries and 13 sectors.
Norway, Denmark and Switzerland are the most virtuous European countries with a 'very low' risk. Also Spain, Portugal, the Netherlands and Belgium did well with a "low" level, while France, Germany and the UK defended themselves with a "fairly moderate" risk. At a global level, Coface downgraded 23 sectors and 4 countries (including Romania in Europe). "The downgrading of sectors and countries that we observe today is the direct result of a scenario dominated by geopolitical instability, trade tensions and increasingly less predictable economic policies", comments Ernesto De Martinis, Coface Mediterranean & Africa Region ceo. "In particular, advanced economies, once considered bastions of resilience, are now showing increasing signs of vulnerability. In a context where uncertainty has become the norm, it becomes crucial for companies to reinforce their credit protection strategies and anticipate risks linked to market developments".
Main trends
."Against a backdrop of unprecedented geopolitical and trade uncertainty," the study highlights, "the global economy is navigating between anticipated slowdowns and escalation risks. Trump's tariffs decisions and tensions in the Middle East are reshaping an unpredictable economic panorama for 2025-2026".
Key trends include that almost 80% of advanced economies experienced an increase in insolvencies in the first quarter of 2025 compared to 2024. Metallurgy is the most affected sector, but traditional industrial sectors (automotive and chemicals) are also under pressure. Among the downgraded sectors, in the US, are information and communication technology (ICT) and retail, while, in China, textiles and clothing are affected by tariffs. 'US tariffs, even if temporarily suspended or reduced, have already reached historically high levels,' Coface explains.
Metallurgy: 600 million tonnes of steel overcapacity weigh on global industry
The metallurgy sector is going through a severe crisis, due to a global steel overcapacity of 600 million tonnes in 2024, or 25% of world production. The unfavourable macroeconomic environment, energy tensions and new tariffs on steel are aggravating the situation for steel producers, particularly in Canada, Mexico and Europe.
