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The Warsaw Voice » Business » January 9, 2008
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Bankruptcies Fall
January 9, 2008 By Michal Jeziorski   
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Poland's buoyant economy is having a positive impact on companies' bottom lines. Bankruptcies for the first nine months of 2007 (data for the entire year is not yet available) were down 24 percent over the same period for 2006.

Only 339 companies went bankrupt during the first three quarters of last year. Mazovia recorded 90 bankruptcies, Silesia 42 and Lower Silesia 35. Opole fared best of all with just four. Łódź was the nation's most improved region having lowered its bankruptcy rate by 70 percent.

"Large disparities like these arise from Poland's regions having different levels of economic development as reflected by their differing numbers of businesses, especially newly established companies," says Tomasz Starus, director of risk assessment at credit insurer Euler Hermes.

The manufacturing sector clocked up almost 40 percent of all bankruptcies during the first three quarters of 2007 with 135 companies going under, according to a Euler Hermes report. Manufacturers of furniture, machinery, equipment, clothing and footwear were hardest hit. Meanwhile, 44 construction companies went bankrupt. The building industry as a whole has somehow managed to cope with the westward exodus of Polish workers.

A total of 58 wholesalers went bankrupt during the period. This is a record fall of 35 percent. Wholesalers benefited from higher overall consumption and higher construction materials prices, especially during the first half of the year. "We can also observe the results of rationalization in the wholesale sector, and the appearance of players combining wholesale and retail activities," says Starus.

Limited liability companies are way out in front in terms of bankruptcies. For these, bankruptcy can be a cheap and easy way of shutting down and starting up elsewhere.
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