The number of corporations that collapsed in Japan during the first half of this year reached its highest level in 11 years.
Analysts say that high prices and severe labor shortages are pushing small and medium-sized enterprises, which are the backbone of the Japanese economy, to the brink.
On the 9th, local media including Asahi Shimbun cited data from the credit research firm Tokyo Shoko Research, reporting that the number of corporate bankruptcies in Japan in the first half of this year (from January to June), with liabilities exceeding 10 million yen, totaled 4,990.
This figure represents a 1.1% increase compared to the same period last year. Historically, it is the highest record in 11 years since 2014 (5,073).
The number of corporate bankruptcies in Japan for the first half of the year has been on the rise for four consecutive years.
The biggest cause identified is "labor shortages." The number of corporations that went bankrupt due to difficulties in hiring or soaring labor costs was 172, representing a 17.8% surge compared to last year. This was the highest number for the first half of the year since the related survey began in 2013.
Tokyo Shoko Research noted that "the wage gap between large corporations and small businesses has widened, making it more difficult to secure talent for small businesses."
The number of bankruptcies classified as "price increase-related" due to the inability to properly reflect rising raw material costs in delivery prices reached 343. Although this is an 8.5% decrease from the same period last year, it still exceeded 300. Cases of bankruptcy due to an inability to manage social insurance premiums or taxes also totaled 77.
By industry, the service sector, including food and hospitality, had the highest number at 1,697 (a 4.8% increase). The construction industry, which faced soaring raw material prices, and the manufacturing industry, which saw increased import expenses due to the depreciation of the yen, followed.
However, the total liability amount was 690.26 billion yen, which is a 4.2% decrease compared to the same period last year. While the number of bankrupt corporations has increased, this indicates that the scale of individual corporate liabilities has decreased.
Tokyo Shoko Research identified the potential for tariff increases by the Trump administration as the biggest variable for the future.
Tokyo Shoko Research analyzed that "concerns about the impact of tariff increases may grow, particularly for manufacturers and export-related corporations," adding that "Corporate bankruptcies will show a gradual increase due to rising prices and interest rates on loans."