Part 4/12:
The industries most affected by this wave of bankruptcies are manufacturing and services, accounting for 30% and 24% respectively of all filings. This dominance underscores how critical debt levels, inflation, and interest rates are impacting these sectors. Many companies in these fields have been struggling despite the narrative of a "soft landing" economy that policymakers have promoted.
Factors Driving the Failures
Several key factors contribute to this rising tide of insolvencies:
Inflation: 61% of large firms blame inflation for reduced demand and increased costs, which eat into profit margins.
High Interest Rates: 45% attribute their financial struggles to rising interest rates making existing debt unmanageable, especially for highly leveraged companies.