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Increase in French cleaning company failures3rd of November 2014
French reporter Christian Bouzols explains that the number of cleaning companies failing in the country has risen by 16 per cent since 2011, but that on the whole business is improving.
The number of cleaning companies failing in France has risen by 16 per cent in three years. That figure is indeed worrying but is a good reflection of France’s current economic difficulties, as shown by the 657 cleaning companies that have failed in 2013, a figure just published by the socioeconomic observatory of the French cleaning federation.
What is even more worrying is that the rate of company failures has increased by 16 per cent since 2011. In total, 1,830 cleaning companies have gone bust in France during the past three years.
That brings the rate of company failures (ie, ratio of companies that fail to companies that remain going concerns) to 2.07 per cent, which shows that companies in the cleaning sector are on average more fragile than other companies, particularly among businesses less than two years old. Indeed, the rate of company failures is 1.4 per cent for the industry as a whole. However it varies from 0.9 per cent to 3.3 per cent depending on the region.
It should be noted that the number of company failures in the cleaning sector is only eight per cent of the number of company closures (about 7,000), most of which are due to the economic crisis, to company owners going into retirement, or to takeovers and consolidation in the sector.
However, one shouldn’t be too alarmed because there are indications that give grounds for optimism. Cleaning activity in France has picked up slightly during the early part of 2014.
Company turnover in the sector has improved compared to the same period of the previous year. This improvement is what transpires from the most recent economic barometer published in May on the basis of a sample of 300 companies.
This increase in activity isn’t universal and only amounts to 1.6 per cent year-on-year. The slight improvement in business for cleaning companies is more evident among small and medium firms, which constitute the bulk of the sector in any case.
The best performances are seen among medium-sized companies with turnovers between one and 20 million euros (improvement of two per cent).
The health sector is in relatively good shape (2.5 per cent year-on-year improvement) and so is the building sector (increase of two per cent). As for the industry as a whole, after being stagnant for many months, it has shown a small annual improvement of one per cent.
Regarding employment, the socioeconomic barometer indicates a 1.4 per cent annual increase in the number of hours worked. It also registers an increase of 4.5 per cent in the incidence of open-ended employment contracts, and an increase of just one per cent in the number of fixed term contracts, which remains virtually stable.