Business Insolvencies Unlikely to Ease Until H2 2027, Says Atradius

Global business insolvencies are forecast to rise by 5% in 2026 as companies continue to grapple with high input costs, trade tensions, and tighter financing conditions. However, Atradius' latest Insolvency Outlook report predicts a 4% decline in insolvencies in 2027, with normalization expected to become visible in the second half of the year.

The insurance firm revised its forecasts upward, acknowledging that insolvencies have proven more persistent than anticipated earlier. Senior Economist Theo Smid stated, "The business environment remains challenging as high input costs and trade tensions persist." While conditions are expected to ease in 2027, Smid cautioned that this marks the beginning of a process, not a full return to normal.

The projected decrease in insolvencies is attributed not to a significant improvement in economic conditions, but rather to businesses gradually adapting to a more challenging economic landscape. The outlook suggests that the most vulnerable firms will exit the market by early 2027, while surviving businesses will continue to adjust their cost structures, financing, and pricing strategies.

Regionally, Europe and Asia-Pacific are both expected to see a 5% decrease in insolvencies, while North America is forecast for a more modest 3% decline. The path to normalization will vary across markets. The UK is expected to see insolvencies remain near historically high levels, while Romania is one of the few markets projected for further increases. Australia and South Korea are anticipated to lead improvements in Asia-Pacific.