Navigating Insolvencies in 2024
Part 2 : Unpacking Sector-Specific Impacts
Roch Simard, MBAAU Group Canada |
About this virtual conference
On March 20, 2024, we hosted a virtual conference focused on navigating insolvencies in the coming year, presented to the Business Development Bank of Canada (BDC). In this insightful session, I had the privilege of interviewing Mr. Maxime Lemerle, the Lead Analyst for Insolvency Research at Allianz-Trade, as we explored the resilience of Canadian entrepreneurs in the aftermath of COVID-19.
Recap of Part 1
Our initial foray into the virtual conference peeled back the layers of Canadian business resilience post-COVID-19. We discussed the stark realities businesses face, with insights from Maxime Lemerle of Allianz-Trade illuminating the landscape of rising insolvencies.
As we proceed to Part 2 of our virtual conference, the stark figure of a 41% increase in insolvencies cannot be understated – particularly in Québec, where the numbers have been especially staggering. The magnitude of this upsurge surpasses what many would consider a ‘hard landing’, signaling deeper economic ripples.
Seeking to understand the details beneath these figures, I prompted Maxime for insights on sector-specific impacts.
Seeking to understand the details beneath these figures, I prompted Maxime for insights on sector-specific impacts.
Maxime Lemerle’s response revealed a broad-based upswing in insolvencies across all 20 sectors in 2023 – a notable departure from the previous year, which saw finance/insurance, mining/oil/gas, and real estate as exceptions.
Standout sectors bearing the heaviest toll included accommodation, contributing 15% to the national rise; construction at 14%, and retail trade at 13%. Not only were the percentage increases alarming – 54%, 58%, and 63%, respectively – but the sheer number of cases in these sectors was also telling: accommodation/food services (584), construction (500), and retail (464).
What’s more, every sector was operating above pre-pandemic levels. In particular, transportation/warehousing, information and cultural industries, educational services, and arts and entertainment soared to over 50% above the 2015-2019 average.
However, the mining/oil/gas sector stood as an outlier, 21% below the average, while construction, despite being lower as well, was rapidly catching up with a 58% increase in 2023.
These revelations from Maxime underscore the widespread challenges industries are facing and highlight the urgent need for businesses to adapt and bolster their resilience strategies in an environment still reeling from the pandemic’s long shadow.
Stay tuned for the next installment of our blog series where Mr. Lemerle will let us know what the horizon looks like from his vantage point.
This insightful session is part of our ongoing commitment to providing valuable perspectives that can help entrepreneurs and business leaders strategize for the future. For those who missed the earlier sessions, we invite you to review the conference materials available on our website for a comprehensive understanding of this evolving landscape.
For those looking for further details or who have additional questions, Jocelyn St-Onge from Allianz-Trade Canada and I, Roch Simard, are readily available as resources to assist you.
We extend our gratitude to Maxime Lemerle for his expert analysis, to Véronik Ménard and her team at the BDC for facilitating this important discussion, and to all the participants who joined us for this conference. It’s through these collaborative efforts that we can equip ourselves with the knowledge and tools needed to thrive in the evolving business landscape of 2024 and beyond.