Insolvencies and activity of companies - ex
Insolvencies and activity of companies
Statistics Iceland publishes data on insolvencies for registered companies on a monthly basis. Each publication is approximately 30 days after the end of each month, at which point most of the insolvency petitions have been registered by the Directorate of Internal Revenue. Some registered companies that go insolvent have had little prior activity. To better capture the effects of insolvency on the labour market and the economy, information about the average number of employees and turnover according to VAT reports in the last full financial year before the insolvency is presented.
Insolvencies enter the business register of the Directorate of Internal Revenue following the publication of an insolvency petition. Since some insolvencies are for companies that have not been active for some years, or even not at all, the number of insolvencies of registered companies may not necessarily capture the effects on the labour market and the economy in a meaningful way. Therefore, the number of insolvencies of registered companies according to The Directorate of Internal Revenue is compiled with the timeliest operational information on the average number of employees and turnover according to VAT reports for the last full year before insolvency.
It is our hope that information on the recent activity of insolvent companies will provide a more reliable initial indication of the effects of insolvencies on the labour market and the economy than can be obtained from the number of insolvencies of registered companies.
Insolvencies of active companies in April-July 2020 up by 42%
Updated: 27 August 2020
There were 52 corporate insolvencies registered in July 2020. Thereof, 29 were for companies that were active in the previous year, i.e. they either had registered employees according to the official PAYE tax registry or turnover according to VAT reports.
Of the 285 insolvencies registered in the period April-July 2020, 153 were for companies that were active in 2019, which is a 42% increase from the previous year. Thereof, 40 were in construction, 22 were in wholesale and retail trade and repair of motor vehicles and motorcycles, 46 were in tourism industries and 45 in other industries.
Companies that were registered for insolvencies during April-July 2020 had about 1320 employees on average in 2019, thereof 530 in construction and 550 in tourism industries. This is a 50% increase from the same months in 2019 and similar to the same period in 2010. The Covid-19 pandemic arrived in Iceland in the beginning of March and by April it was in full force.
For information on insolvencies of registered companies, refer to: Insolvencies of enterprises by field of activity 2008-2020