Business insolvencies are rising sharply once again as the global economic outlook continues to deteriorate. In early 2026, worldwide insolvencies increased by 12%, largely driven by a significant surge in North America (+22%). Amid persistent geopolitical tensions and escalating cost pressures, Coface now projects a 6% global increase in insolvencies for 2026, highlighting a rapidly weakening business environment and a deterioration occurring faster than previously anticipated.
Key figures
- +12%: surge in global insolvencies in early 2026 points to a rapidly worsening business environment.
- +22%: North America is experiencing a particularly steep jump in insolvencies, making it the primary contributor to the global upswing.
- +6%: insolvencies are now projected to grow 6% in 2026, more than twice the original estimate.
The economic slowdown is now clearly reflected in the latest data
Recent data clearly reflect the growing strain on the global economy. The 12% rise in insolvencies in early 2026, combined with a 22% spike in North America, demonstrates the magnitude of the shock facing businesses and confirms a rapid decline in economic stability.
This slowdown is largely driven by geopolitical uncertainty, particularly tensions in Iran. The economic fallout is becoming increasingly visible through rising supply chain costs, heightened energy price volatility, and growing uncertainty that is weighing heavily on corporate investment decisions.
Data for graph in .xlsx format
Forecasts for 2026 have been revised sharply upward, reflecting a more challenging outlook
In light of these developments, Coface has significantly upgraded its insolvency outlook for 2026. Global business insolvencies are now expected to increase by approximately 6%, more than double the initial forecast made earlier in the year.
Major economies are set to experience notable increases, including the United States (+8%), France (+8%), and Japan (+7%). Germany and the Netherlands are projected to see insolvencies rise by around 5%, while more moderate growth, between 2% and 3%, is anticipated in Spain, Italy, and the United Kingdom.
Data for graph in .xlsx format
High interest rates are intensifying an already fragile economic landscape
High interest rates continue to place significant pressure on businesses already operating in a fragile economic environment. Although monetary easing has begun, borrowing costs remain elevated after years of tightening, keeping access to credit expensive and restrictive.
This challenge is intensified by historically high corporate debt levels. Even small fluctuations in interest rates can have a major impact: a modest increase of 25 basis points could further accelerate global insolvencies, pushing them closer to the elevated levels seen in 2025.
As a result, persistently high financing costs are limiting companies’ ability to refinance debt, manage cash flow, and withstand additional economic shocks, further aggravating an already challenging business landscape.
Cyclical industries are bearing the brunt of the downturn
Industries most sensitive to economic cycles and financing conditions are facing the greatest risks. Sectors such as construction, chemicals, and textiles remain particularly vulnerable due to their exposure to rising production costs and fluctuating demand.
Across major economies, the impact is increasingly visible:
- United States: industrial and construction sectors are under pressure from higher financing costs and weakening demand.
- Germany: chemical and construction industries continue to struggle with elevated energy prices and subdued economic activity.
- France: construction faces persistent pressure from high borrowing costs, while retail is affected by reduced consumer purchasing power.
- Japan: highly leveraged sectors are especially vulnerable as financing conditions remain tight.
In these industries, the combination of rising costs, shrinking margins, and restricted access to funding significantly limits companies’ ability to adapt. Small and medium-sized enterprises (SMEs) are particularly affected due to their limited diversification and greater exposure to cash flow volatility.
As a result, these sectors have become key contributors to the increase in insolvencies observed since 2025, underscoring the structural nature of the challenges they face.
Government intervention unlikely to provide the same buffer
The relatively low level of insolvencies recorded between 2020 and 2023 was largely due to substantial government support measures introduced during the Covid-19 pandemic and the aftermath of the Ukraine conflict.
Although some countries are reintroducing support programs, their scale is significantly smaller. In major European economies — such as France, Germany, Italy, Spain, and the United Kingdom— fiscal support during 2022–2023 represented approximately 2% to 4% of GDP.
By comparison, current measures are far more limited, with the largest program recorded in Spain at around 0.3% of GDP. Additionally, these interventions are more targeted, focusing on the most vulnerable sectors and companies.
While this targeted approach may provide some relief, it is unlikely to deliver the broad economic cushioning seen in previous crises. Consequently, the ability of governments to contain the rise in insolvencies appears increasingly constrained.
