The number of corporate bankruptcies in July increased by 14,2% from a year earlier to 802, rising for the second consecutive month, Tokyo Shoko Research Ltd. said on Thursday. It is the first time since May of 2017 that monthly bankruptcies increase by 10% or more. It is also the first time since then that the number of bankruptcies has exceeded 800.

Poor sales and labor shortages have been behind the increase, which the credit research firm said has changed the state of corporate failures from being "bottom up" to "rising."

Bankruptcies increased in nine of the ten industrial sectors covered in the survey. The increase was most evident in the services, retail and transportation sectors, which suffered a lot from labor shortages.

Meanwhile, total liabilities left by bankrupt companies fell by 17,1 percent to 93,4 billion yen, falling for the second consecutive month as small-scale bankruptcies, with debts of less than 100 million yen, accounted for much of total.

Citing concerns, such as the planned October excise tax increase and the strong yen, Tokyo Shoko Research said that “the potential is increasing for a [bankruptcy] increase, especially among small businesses that have failed to improve business.” .

Source: Jiji Press

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