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Bankruptcies in Spain at highest in 8 years

The construction, real estate and service sectors accounted for nearly 60 per cent of business insolvencies in the January-March period, PricewaterhouseCoopers said in a report.

IANS | April 10, 2012 | Updated 14:05 IST

More than 1,600 Spanish firms declared insolvency in the first quarter, a rise of 21 per cent over the same period in 2011, PricewaterhouseCoopers has said in a report based on official data.

Adding in personal bankruptcies brings the figure to 1,958, the highest quarterly total in eight years.

The regions of Madrid, Valencia and Catalonia, which includes Barcelona, led Spain in bankruptcies in the first quarter, while the largest annual increase - 93 per cent - was in the northwestern region of Galicia.

The construction, real estate and service sectors accounted for nearly 60 per cent of business insolvencies in the January-March period, PwC said.

Most of the failing firms had assets of less than 2 million euros ($2.6 million).

The number of workers affected by commercial bankruptcies rose 8 per cent compared with the first quarter of 2011, to 2,566.

The report points to the likelihood that bankruptcies will remain on the rise for the rest of 2012, "pushing away any sign of recovery", PwC's Enrique Bujidos said.

The 2008 global financial meltdown came as Spain was struggling with the bursting of a decade-long real estate bubble. The ensuing slump has led to numerous business failures and pushed the country's jobless rate to nearly 23 per cent, representing 5.2 million people out of work.

Unemployment among Spaniards under 25 is 48 per cent, while tens of thousands of families have been evicted from their homes after falling behind on their mortgages.

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