The number of company bankruptcies in Germany is increasing. Certain industries are particularly affected by the risk of having to file for bankruptcy. There is no improvement in the situation in sight.
Although the number of bankruptcies is increasing, significantly fewer companies are collapsing in Germany than before. While 30,000 to 40,000 companies went bankrupt every year at the beginning of the millennium, the credit agency Creditreform is expecting 18,100 insolvent companies this year. In 2022, Creditreform counted 14,700 bankruptcies. Next year there will likely be around 20,000 bankrupt companies in Germany.
“We don’t see a wave of insolvencies sweeping the entire economy with it,” said Patrik-Ludwig Hantzsch from Creditreform. However, since bankruptcy affects suppliers, customers, employees and financiers, the consequences are significant.
Exception rule during the Corona period
Entrepreneurs must file for bankruptcy if they are insolvent or over-indebted. Companies that only got into short-term difficulties because of the pandemic should be protected from this. Therefore, the reporting requirement was interrupted from March 2020 to April 2021.
As a result, the number of company bankruptcies fell to a low 16,000 cases in 2020. However, they resulted in a very high amount of damage of 43 billion euros. If a larger company ran out of money, the Corona rule was of no use. It was mainly small companies that were able to avoid insolvency proceedings thanks to the new option.
In 2021, the amount of damage rose again to 51 billion euros – with well under 15,000 bankruptcies. Here too, it was mainly the big ones who were hit. “Many companies were still supported,” says Patrik-Ludwig Hantzsch from Creditreform, summarizing state aid that prevented many bankruptcies or postponed them.
It affects both small and large people
The figures from the Federal Statistical Office show the logistics industry to be particularly affected – i.e. freight forwarders, transport companies or companies that operate warehouses and distribute goods. Creditreform, on the other hand, sees the construction industry as the number one bankrupt industry. The number of bankruptcies of property developers and developers has quadrupled since 2022, and that of road construction companies has tripled.
Almost half of the insolvencies – with a slight downward trend – affect sole proprietorships and entrepreneurial companies. These are typically small, capital-poor companies. The official statistics, which summarize reports from German insolvency courts, also show that young companies are affected in half of the cases.
More people affected by bankruptcies Traditional companies
The number of cases says little about the consequences. Because when old, established and large companies go bankrupt, there are far more people affected. According to official figures, companies that have been on the market for more than eight years only account for a third of insolvency cases. However, they employ two thirds of the total number of employees affected by bankruptcies.
The number of bankruptcies is a long way from the number after the banking and financial crisis in 2008 and 2009. But unlike back then, warns Patrik-Ludwig Hantzsch from Creditreform, no recovery phase is to be expected. Because of the many problems faced by companies – burdens such as the costs of the “green” transformation, a lack of digitalization, a lack of employees and high interest rates – there is no sign of any improvement.