TOKYO, July 5 (Xinhua) -- The first half of 2024 saw a significant increase in corporate bankruptcies across Japan, marking the highest level in a decade, a local credit research company reported on Friday.
During the January-June period, the number of business failures with debts of no less than 10 million yen (about 62,200 U.S. dollars) surged by 22 percent year on year to total 4,931 cases, according to a survey conducted by Tokyo Shoko Research Ltd.
The spike, driven by high inflation and labor shortages, has marked the highest since 2014.
Bankruptcies due to inflationary pressures, such as rising procurement costs, rose by 23.4 percent to 374 cases, showed the report, which highlighted the exacerbating impact of a weakening yen.
It suggested that the number of affected companies could increase further, potentially exceeding 10,000 cases annually.
While large manufacturers listed in the stock market have thrived, smaller businesses are bearing the brunt, with 88.4 percent of bankruptcies occurring in companies with fewer than 10 employees, the survey found out.
By industry, eight out of 10 industries saw growth in the number of corporate bankruptcies.
The construction and transportation sectors have been particularly affected, with bankruptcies in construction rising by 20.6 percent to 947 cases, due to both regulatory changes and soaring material costs.
Labor shortages have been a critical factor, causing related bankruptcies to more than double by reaching 145 cases, the highest since 2013.
June alone saw 820 bankruptcies, a 6.5-percent increase from the previous year, marking the 27th consecutive month of rising figures as inflation and economic pressures continue, according to the survey. ■