The number of corporate bankruptcies involving liabilities of ¥10 million or more in Japan in the April-September period has hit the highest level in 12 years, partly due to labor shortages, Tokyo Shoko Research said Wednesday.

In the first half of fiscal 2025, which began in April, business failures rose 1.5% from a year earlier to 5,172, up for the fourth consecutive year. The figure was close to the 5,505 recorded in the same period of fiscal 2013.

Meanwhile, total liabilities plummeted 49.6% to ¥692,772 million, following a large-scale bankruptcy in the first half of fiscal 2024.

Of the total cases, 202, up 33.7%, were blamed on manpower shortages caused by soaring labor costs and other factors, marking the highest level for the fiscal first half since fiscal 2013, when comparable data became available.

"Many companies went bust after they saw an exodus of employees due to being unable to raise wages or offer more attractive conditions than other companies," an official from Tokyo Shoko Research said.

The number of bankruptcies reflecting soaring prices also increased, by 3.9%, to 369.

By industry, the number of business failures in the services sector, including restaurant and hotel operators, climbed 4.0% to 1,762.

The construction industry saw a 7.4% rise to 1,036, with higher materials prices significantly impacting cash flows.

In September alone, the number of corporate bankruptcies rose 8.1% from a year earlier to 873, while total liabilities fell 15.2% to ¥112,470 million.