Japan Bankruptcies Up 17.1 Pct.
TOKYO (AP) _ Japan’s severe recession caused corporate bankruptcies to soar 17.1 percent to 19,171 cases in 1998, the second highest level since World War II, a private credit research company said Tuesday.
Debt left behind by collapsed companies rose 2.6 percent to $126 billion, the highest since 1945, said The Teikoku Databank Ltd. The previous record of $125 billion was set in 1997.
The most bankruptcy cases in a year occurred in 1984, when 20,841 companies went out of business amid a restructuring of industry as Japan’s phenomenal postwar growth rates abated.
The country’s severe economic slump took its toll across the business spectrum, as bankruptcies increased at double-digit percentage rates in all sectors last year. Companies were hurt by plunging prices and the severe credit crunch in the banking sector, which is staggering under massive soured debts.
Failures in the construction industry exceeded 5,000 cases for the first time in 13 years, and failures in manufacturing topped 3,000 for the first time in 12 years.
On the bright side, the number of bankruptcies trailed off toward the end of the year, with corporate collapses falling in December for the second straight month.
December bankruptcies dropped 26.6 percent from a year earlier to 1,169 cases, while bankruptcy debt dropped 59.7 percent to $97.5 billion.
In November, the number of company failures fell 4.6 percent to 1,360 cases for the first decline in 18 months.
Teikoku said small company bankruptcies fell sharply in December after the government instituted new programs to help smaller companies get loans.
But it said bankruptcies of medium-sized companies continued to rise, and that overall business conditions remained extremely harsh.