Bankruptcies in Germany at the Highest Level in Ten Years

The wave of bankruptcies in Germany extended into July, reaching the highest level in ten years, reported the Institute for Economic Research (IWH).

In July, a total of 1,406 companies filed for bankruptcy, a third more than last year, calculated the IWH in a study published on Thursday.

The institute analyzes the latest court data on bankruptcy filings and correlates them with company balances, notes the dpa agency.

In 10 percent of the companies with the highest revenue, bankruptcies will affect nearly 10,000 jobs, they warned.

In 2023, according to statistics, 17,814 companies declared bankruptcy, which is 22.1 percent more than the previous year.

The wave of bankruptcies affected all sectors in July, but the largest jump was recorded in the manufacturing industry with 145 applications in July, 45 percent more than in June.

Data for August are expected to show a slight decline, but September will bring a continuation of the upward trend, said Steffen Mueller, head of the bankruptcy research at IWH.

This means that the number of applications will likely remain above pre-pandemic levels, estimates Mueller.

IWH’s data for July builds on a study by the restructuring consulting firm Falkensteg, which found that in the first half of the year, 162 companies with revenues exceeding 10 million euros filed for bankruptcy, 41 percent more than in the same period last year.

The wave of bankruptcies among medium and large companies in Germany was triggered by rising energy and material costs and weaker demand, with the highest number of applications coming from the real estate sector, automotive suppliers, and machinery manufacturers, quoted the business newspaper Handelsblatt on the research results.

In May, the German Chamber of Industry and Commerce (DIHK) predicted a continuation of the upward trend, highlighting that structural problems such as a lack of qualified labor are hindering the German economy.