EY: The Construction, Real Estate, and Automotive Sectors Lead in Restructuring Activities
Foreks - EY has published the results of its fifth “EY Restructuring Pulse” research, which includes the views of debt restructuring professionals working at leading banks in the CEA region (Central, Eastern, and Southeastern Europe) and Austria. The report reveals significant information about restructuring trends in the region, sector transformations, and the future of financial solutions.
The report, regularly conducted by EY (Ernst & Young), an international consultancy providing auditing, assurance, strategy, corporate finance, and tax services, offers important insights into restructuring markets. The 5th version of the “Restructuring Pulse” research sheds light on the dynamics of the restructuring market in the CESA region (Central, Eastern, and Southeastern Europe and Central Asia), providing critical assessments of current trends and future expectations.
According to the research, the most significant factors affecting restructuring in the past six months include a decrease in sales (23%) and a slowdown in economic growth (20%), with these trends expected to continue in the upcoming period. Additionally, the factors anticipated to trigger restructuring processes are also primarily the decrease in sales (21%) and the slowdown in economic growth (17%).
Construction, real estate, and automotive sectors maintain leadership The research findings indicate that the sectors with the most intense restructuring activities are construction, real estate, and automotive. In particular, the automotive sector is undergoing serious changes due to cost issues in the production of internal combustion engines and electric vehicles.
Regional differences are noteworthy The report highlights that the largest increase in restructuring activities has occurred in countries such as Austria, Poland, Serbia, and Slovakia, while moderate increases are expected in Hungary, Ukraine, Bulgaria, Slovenia, and Turkey. Conversely, Croatia is among the countries where these activities have decreased.
Debt restructuring and maturity extension stand out in restructuring solutions Debt restructuring and maturity extension continue to be the primary solutions in restructuring processes. Moreover, solutions such as operational restructuring and refinancing are gaining increasing importance.
The research findings clearly illustrate how economic and sectoral transformation processes shape restructuring activities, demonstrating that the challenges faced by businesses can be overcome with effective and innovative solutions. The EY Restructuring Pulse research continues to guide not only in understanding the present but also in identifying future trends and opportunities.
Regarding the EY Restructuring Pulse research, Orçun Makal, Partner at EY Turkey, leader of Debt Advisory in Central, Eastern, Southeastern Europe, and Central Asia, stated: “According to the research findings, the increase in restructuring activities is continuing at a slower pace compared to previous years. Most restructuring activities are expected to occur in the first half of 2025. There is a trend of increasing revenue pressures. This situation becomes the primary focus, replacing the cost-related pressures from previous years, while debt restructuring-maturity extension continues as the core financial restructuring tool. A significant increase in operational restructurings is observed as part of the overall solution.”