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Biz closures hit record high in Japan in 2020

  • January 18, 2021
  • , Jiji Press , 7:14 p.m.
  • English Press

Tokyo, Jan. 18 (Jiji Press)–The number of companies in Japan that closed operations or were dissolved in 2020 rose 14.6 pct from the previous year to a record high of 49,698 amid the spread of the novel coronavirus, Tokyo Shoko Research Ltd. said Monday.

 

“The government’s financing support is helping companies to avoid bankruptcy in the short term, but this doesn’t lead to improvements in businesses from medium- and long-term perspectives, forcing many companies to shut down,” an official at the credit research firm said.

 

In 2020, the number of companies that went bust hit a 30-year low of 7,773.

 

The services sector had 15,624 closures and dissolutions, or some 30 pct of the total. The construction industry was in second place, at 8,211, followed by the retail sector, at 6,168.

 

Over 80 pct of the representatives of companies that shut down or were dissolved were in their 60s or older.

 

This suggests that the epidemic made owners hurry to take decisions to shut down. Currently, the number of closures is on a rising trend due to the country’s aging society and lack of successors.

 

Tokyo Shoko Research warned of a further increase in the number of closures and dissolutions after the government declared a state of emergency over the virus for Tokyo and 10 other prefectures earlier this month.

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