Status: 03/17/2023 10:31 a.m
The number of insolvencies in Germany rose last year, but there was no large wave of bankruptcies. Particularly affected: construction and trade. Experts warn of increasing risks.
Last year, Germany recorded an increase in corporate insolvencies for the first time since the global financial crisis of 2008/2009. However, the feared wave of bankruptcies did not materialize – despite the challenges posed by the energy crisis and rising interest costs.
According to the Federal Statistical Office, 14,590 cases of company insolvency were reported to the district courts, 4.3 percent more than in the previous year. However, with just 13,933 cases in 2021, the lowest value since the introduction of the insolvency code in 1999 was registered.
Construction and trade most affected
The probable claims of the creditors from the reported company insolvencies were estimated by the district courts at around 14.8 billion euros. In comparison, the claims in 2021 were around 48.3 billion euros.
“This decrease in claims with a simultaneous increase in the number of company insolvencies is due to the fact that more economically important companies filed for bankruptcy in 2021 than in 2022,” according to the statisticians.
Most corporate insolvencies were in the construction industry with 2698 cases, followed by trade with 2239 procedures. On the other hand, 16.6 percent fewer consumer bankruptcies were registered.
Payment practices deteriorate
Due to higher production costs, growing personnel expenses and a significant rise in interest rates, experts expect more company bankruptcies in Germany. Credit insurer Allianz Trade expects bankruptcies to rise 15 percent this year, followed by a further 6 percent increase in 2024.
“Although this is the strongest increase since the European debt crisis, it is from a very low level,” said Milo Bogaerts, head of Allianz Trade in Germany, Austria and Switzerland. “In this respect, it is currently only a gradual normalization of the insolvency process.”
According to a study by the insurer, companies waited longer for their bills to be paid last year than in the previous year. In Germany, bills were only paid after 49 days in 2022, four days later than in the previous year. Allianz Trade sees this as a clear indication of increasing insolvency risks.
High energy prices and wage agreements are a burden
The Institute for Economic Research Halle (IWH) assesses this in a similar way. “We expect higher insolvency figures for the next few months,” said the head of the IWH department for structural change and productivity and the insolvency research based there, Steffen Müller, recently. In addition to high energy prices, high wage agreements and increased refinancing costs are increasingly burdening companies’ balance sheets.