Status: 12/13/2022 4:32 p.m
For the first time since the economic crisis of 2009, the number of company bankruptcies in Germany is increasing again. The credit agency Creditreform sees this as a sustainable trend reversal.
For the first time since the financial crisis of 2009, the number of company bankruptcies rose again in the year that was coming to an end. According to Creditreform estimates, 14,700 companies will have gone to insolvency court by the end of the year, four percent more than in 2021. This is the first increase since 2009, when company bankruptcies soared by a good eleven percent to around 33,000, the credit agency said .
“Persistent inflation, rising interest rates and energy costs as well as an increasingly tough competitive situation are affecting the substance of many companies,” said Creditreform chief economist Patrik-Ludwig Hantzsch. Numerous companies would have received help during the corona pandemic and thus been able to keep their heads above water. “But these crises that are now overlapping are simply too much for many.”
Trend reversal in insolvency events?
Like many other experts, Hantzsch also expects a further increase in corporate insolvencies next year. The increase from 2021 to 2022 is moderate, “but should only be the prelude to a further acceleration of the insolvency process”.
The general economic situation shows a high potential for payment defaults in 2023 and in the coming years. Creditreform sees the fact that debt-financed companies have to cope with rising interest expenses as a result of the European Central Bank’s (ECB) interest rate hikes as a further burden.
It is still unclear which liquidity aids will be introduced by politicians dealing with electricity prices and inflation. “That is the very crucial question, which also directly influences the insolvency figures,” said the economist.
In 2021, which was still heavily influenced by the pandemic, the number of company bankruptcies fell by 11.9 percent to 14,130. In order to avert a wave of bankruptcies as a result of the pandemic, the federal government had made exceptions possible.
Significantly more bankruptcies of large companies
According to Creditreform, there were 25 percent more bankruptcies in large companies with more than 250 employees this year than in 2021. Prominent examples are Galeria Karstadt Kaufhof and the shoe retailer Görtz. However, 85.8 percent of all company bankruptcies affected very small companies with up to ten employees. According to Creditreform, a total of 175,000 jobs were lost in 2022 due to insolvencies – a significant increase of 24.1 percent compared to 2021.
Consumer bankruptcies down
According to Creditreform, however, consumer insolvencies have fallen significantly. Their number will fall by 17.3 percent to 65,300 cases in 2022 compared to the previous year. So far, the energy crisis has not led to a wave of bankruptcies among private individuals, according to the credit agency. With a recession and the increasing duration of the burdens, however, consumers are threatened with more payment defaults in the future.
In 2021, consumer bankruptcies shot up by 86.6 percent to almost 79,000 cases. The reason for this was a change in the law that made it possible to be released from the remaining debt after three instead of six years. According to experts, many of those affected had waited with their bankruptcy application until this change took effect.