The number of company bankruptcies rose significantly last year. However, historically speaking, the level remains comparatively low. Experts are expecting a further increase in bankruptcies.
Economic slowdowns, high inflation and rising credit costs caused the number of company bankruptcies to rise last year. The number of corporate insolvencies filed increased by 22.1 percent to 17,814, the Federal Statistical Office announced today. In 2022 there was an increase of 4.3 percent, meaning that the number at that time was only slightly above the low level of the year 2021, which was characterized by special Corona regulations.
Compared to the pre-Corona year 2019, there were even 5 percent fewer bankruptcies this time. “In historical comparison, the number of corporate bankruptcies was very low,” is the statisticians’ conclusion. During the financial crisis of 2009, for example, it was much higher at 32,687.
“Consistent double-digit growth rates”
The current development in the number of regular insolvencies filed also points to another difficult year. When viewed monthly, the number of regular insolvencies filed in February was 18.1 percent higher than in the same month last year, according to preliminary data. In January 2024 the increase was 26.2 percent. Since June 2023, double-digit growth rates have been observed year-on-year.
The proceedings are only included in the statistics after the first decision of the insolvency court. The actual date of the bankruptcy filing is often almost three months beforehand.
“Normalization of the insolvency events”
Experts do not yet see a “wave of bankruptcies” approaching Europe’s largest economy. Insolvency administrator Alexander Eggen from the Frankfurt law firm Schultze & Braun, for example, is currently talking about a “normalization of insolvency events”.
However, experts expect a further increase to around 20,000 company bankruptcies this year. Weakened by the Corona years, high energy prices and increased interest rates, more and more companies are getting into difficulties. In addition, exemptions with which the state tried to avert a wave of bankruptcies during the pandemic have expired.
Payment difficulties increase
“The major economic and structural challenges in Germany are affecting the economy,” said DIHK medium-sized business expert Marc Evers. “Unfortunately, a further increase in corporate insolvencies can be expected in the coming months. Because more and more companies are reporting that their customers are having payment difficulties.”
A DIHK survey showed that the proportion of companies affected by increasing bad debts has now risen to a quarter, particularly in the health sector, in social services and also in motor vehicle sales and repairs.
Significant increase in receivables
The local courts put the claims of creditors from the bankruptcies reported last year at around 26.6 billion euros. In 2022 it was around 14.8 billion euros. One reason for the significant increase: 138 major insolvencies were registered with claims of at least 25 million euros – 38 percent more than in 2022.
Recently, bankruptcies of well-known companies, especially in the fashion retail sector, made headlines: Peek & Cloppenburg, Gerry Weber, Reno, Salamander, Görtz and Signa Sports United.
Based on 10,000 companies, there were 52.5 bankruptcies last year. Most of the bankruptcies occurred in the transport and warehousing sector with 106.5 cases. This was followed by other economic service providers, such as temporary employment agencies, with 84.9 cases, the construction industry with 79.9 cases, the hospitality industry with 72.3 cases and the manufacturing industry with 63.5 cases.
There are particularly many bankruptcies in the hospitality industry
According to the credit agency Creditreform, the situation in the catering industry is particularly difficult. The number of bankruptcies there rose above average last year to 27 percent. Around every tenth catering company went out of business in 2023, which corresponds to 14,000 cases. Caterers, among others, were particularly hard hit (plus 67 percent).
According to the head of Creditreform economic research, Patrik-Ludwig Hantzsch, the prospects for the industry are anything but rosy: “Our evaluations suggest that the insolvency trend in the hospitality industry will continue. The wave has only just begun.”