According to Tokyo Shoko Research, the number of corporate bankruptcies in August (with liabilities of at least 10 million yen) increased by 3.1% year-on-year to 830 cases, marking the third consecutive month of increase and the highest level for August in 14 years since 2012. Labor shortages and poor sales were contributing factors. There were 32 bankruptcies due to labor shortages (compared to 23 in the same month last year), the highest for August on record. The research firm noted that wage increases are spreading to small and medium-sized enterprises amid widespread labor shortages, and pointed out that "stretching wage hikes could exacerbate the deterioration of corporate cash flow." By industry, the service sector saw the most bankruptcies with 291 cases, up 20.2%, of which the restaurant industry had 80 cases, up 42.8%. The construction and retail industries also exceeded the levels of the same month last year.
