US: Small Businesses File for Bankruptcy at Record Pace
Small businesses across the United States are experiencing a surge in bankruptcies, surpassing levels not seen since 2020. According to a UBS note reviewed by The Epoch Times, conditions could become worse as the knock-on effects from the recent banking crises begin to manifest.
The note from UBS Evidence Lab shows private bankruptcy filings in 2023 have exceeded the highest point recorded during the early stages of the COVID pandemic by a considerable amount. The four-week moving average for private filings in late February was 73 percent higher than in June 2020.
As of February 2023, the monthly bankruptcy filings exceeded 31,000, an 18 percent rise from the 25,564 bankruptcy filings reported in February 2022, according to data provided by the American Bankruptcy Institute.
Industries hit hardest by the wave of bankruptcies include real estate, health care, chemicals, and retail outlets, according to the Swiss Bank’s report.
The Federal Reserve’s monetary tightening to combat inflationary pressures has been largely behind the uptick in bankruptcies. UBS indicated that the fear of a credit crunch has further worsened the rise in defaults.
