8,984 business failures in first six months

A private credit research firm has found that 8,984 firms with a liability of more than 10 million yen (90,000 dollars) went bankrupt during the first half of 2003. More than 70 percent of these business failures were related to the economic recession.

According to Teikoku Data Bank Ltd., slumps related to difficulties in sales and collection of accounts receivable are a typical cause of recession-related bankruptcies, which account for 77.5 percent, the worst ever.

The total number of failures declined by 9 percent compared with the number in the first half of 2002. This is because corporations are taking measures to avoid the risk of failure by restructuring themselves and retrenching margin transactions.

Teikoku Data Bank said that the business climate is deteriorating further, without room for optimism. (end)