Crisis in Luxembourg's construction industry: bankruptcies break records
Ubaid E. Alyafizi, Unsplash
Luxembourg's construction sector continued to experience a serious crisis in 2024, with the number of bankruptcies increasing by 27.1% year-on-year to 197 cases. This increase followed an even greater increase of 43.52% in 2023, indicating a deep and persistent problem. Among the major companies that declared bankruptcy are Maconlux Sàrl, Carvalho Constructions Générales Sàrl and Cenaro.
Creditreform experts stress that despite signs of recovery in the third quarter of 2024, this is not enough to stabilise the sector. They recommend the government to accelerate the implementation of large construction projects to stimulate the market.
The crisis in the construction industry has affected many related professions, including heating systems, electrical installation and tiling. This emphasises the importance of supporting not only the construction companies themselves, but also the entire ecosystem of businesses that depend on infrastructure contracts.
Overall statistics show that the number of bankruptcies in Luxembourg reached 1,193 cases - 26.38% more than in 2023. This figure is back to the level of the crisis year 2021, when 1,199 bankruptcies were registered.
The service sector was the hardest hit:
Companies that have been in existence for more than five years were most at risk:
Young enterprises, on the contrary, showed resilience: the number of bankruptcies among them decreased by 11.66%. This may indicate greater flexibility and adaptation of new players to economic challenges.
According to experts, without systemic support, the construction sector will remain vulnerable. The key factor for recovery may be the implementation of state infrastructure projects and reforms aimed at reducing administrative barriers for business.
However, with inflation and continued pressure on supply chains, the crisis may lead to structural changes. In particular, there may be increased market consolidation, the exit of smaller firms and a reorientation towards sustainable construction using energy-saving technologies.
