U.S. corporate bankruptcies fell in February, marking the second-slowest month since the start of 2020, according to S&P Global Market Intelligence data.
The 21 filings in February dropped from 30 a month earlier. November 2021 had the lowest number of bankruptcies since the start of 2020 at 17 filings.
Bankruptcies for the year so far are off to the slowest start since 2010. There had been 51 corporate filings in 2022 as of Feb. 28, according to the data, compared with 74 during the same time period in 2021 and 100 in 2020.
Filings jumped during the pandemic, reaching a 10-year-high in 2020. Since then, activity has slowed as struggling companies take advantage of easy lending conditions and lingering effects of government stimulus.
Industrials' troubles
The industrials sector has the most bankruptcies so far in 2022 with nine filings as of Feb. 28.
Companies within the sector that filed for bankruptcy during 2022 so far include those in construction, roofing, security services, environmental solutions and engineering.
The healthcare sector had the second highest number of bankruptcies as of Feb. 28 with seven filings.
Staffing shortages have hammered healthcare providers and a wave of canceled elective procedures due to those shortages and pandemic fears have also contributed to distress.
'Pockets of distress'
Easy access to capital, increasing consumer demand and high valuations are expected to keep bankruptcy activity low in 2022, but there will still be challenges, according to PwC.
Supply-chain issues, labor shortages, rising raw material costs and uncertainty around the ongoing pandemic will play into recovery for businesses, PwC said in its 2022 bankruptcy and restructuring outlook report.
"We expect these challenges will likely lead to pockets of increasing financial distress in 2022," the report said. "But absent a currently unforeseen catalyst, we don't see a broad-based increase in bankruptcies and restructuring activity in the near term."
Editor's note: This Data Dispatch is updated on a regular basis and the last edition was published Feb. 11.
Bankruptcy figures include public companies or private companies with public debt with a minimum of $2 million in assets or liabilities at the time of filing, in addition to private companies with at least $10 million in assets or liabilities. Market Intelligence may remove companies from this list if it discovers that their total assets and liabilities do not meet the threshold requirement for inclusion.
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