Bankruptcy Cases in Japan Increase Due to High Prices - Private Survey

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Bankruptcy Cases in Japan Increase Due to High Prices - Private Survey

The building captured in the image was once the location of a food service company in Hiroshima city that faced bankruptcy. According to a survey conducted by Teikoku Databank, there has been a 1.8-fold increase in corporate bankruptcies in Japan, with 837 cases reported in fiscal 2023. The sharp rise in bankruptcies is primarily attributed to high prices, which have posed challenges for businesses across different sectors.

Among the sectors affected by bankruptcies, the construction industry accounted for 25.0 percent of the cases, totaling 209 failures, followed by the manufacturing industry with 180 cases (21.5 percent), and the transportation and communications industry with 151 cases (18.0 percent). The data shows a concerning trend, as the number of bankruptcies in the recent years has exceeded those in the past five years, with a notable impact observed in the current fiscal year as well. Specifically, the survey highlighted that 463 cases in fiscal 2022, 136 in fiscal 2021, 94 in fiscal 2020, 123 in fiscal 2019, and 96 in fiscal 2018 were linked to high prices.

Over the years, the influence of high prices, exacerbated by surging raw material costs, has become increasingly pronounced. The economic challenges posed by these factors have led to a surge in business failures, signaling a tough environment for companies operating in Japan. With the number of bankruptcies on the rise, it is evident that addressing the issue of high prices and their impacts on businesses is crucial for the country's economic stability and growth.