No Recession For Bankruptcy Specialists

Corporate insolvencies are rising worldwide, with North America leading the trend. The major factors fueling bankruptcies are economic and political uncertainty exemplified by trade wars and Brexit. Globally, the economy is losing momentum, leading to the first annual upturn in corporate insolvencies across advanced markets since the 2008 financial crisis. Monetary policy that is loosening access to capital across developed markets, especially the U.S., is expected to provide some support for growth in 2020. Global GDP is forecast to accelerate slightly, assuming progress in resolving trade differences, but 2019 will mark a reversal in the downward trend of annual insolvencies in North America since 2010, with a projected increase of 3.2 percent. Both the U.S. and Canadian economies are expected to slow down further. The latest escalation of the U.S. China trade war, which includes a 15 percent tariff on $300 billion worth of consumer goods from China, could hurt the already fragile retail sector in particular. Ongoing trade tensions and increasing financial vulnerabilities in the corporate sector are expected to increase U.S. insolvencies another two percent in 2020.