Central and Eastern Europe: Less business insolvencies despite temporary headwinds in the construction sector
Despite some slowdown last year, average GDP growth remained at a solid level of 2.9% in Central and Eastern Europe. Economies have been benefiting from the favourable situation on the labour market, with contracting unemployment rates and rising wages. The improving macroeconomic environment has had positive effects on business. Company insolvencies dropped by 14% in 2015 and a further 6% in 2016. Over the course of last year, 6 entities per 1,000 became insolvent.
The regional breakdown reveals a wide variety of dynamics, ranging from a fall of 35.6% in proceedings in Bulgaria, through to a minor increase of 2.6% in Poland and a surge of 56.9% in Hungary. Regionwide however, the downturn in construction activities led to companies within this sector being widely represented in insolvency statistics. Construction consequently took first place in the ranking of fl op sectors in the CEE region.