The trend towards more company bankruptcies in Germany continued at the beginning of the year. The number of people applying for regular insolvencies increased by more than a quarter – also because of government aid.
Difficult conditions such as the economic downturn, high interest rates and expensive energy forced more German companies to go out of business at the beginning of the year. The number of regular insolvencies filed rose by 26.2 percent in January compared to the same month last year, as the Federal Statistical Office announced. In December 2023, the increase was less than half as high at 12.3 percent.
When it comes to statistics, it should be noted that the standard procedures are only included after the court’s first decision. In many cases, the actual date of the bankruptcy filing was almost three months earlier, it was said.
Normalization after state aid expires
“Since June 2023, double-digit growth rates have been observed year-on-year,” the statisticians said. Overall, the insolvency figures for this period remained slightly below the level of the pre-Corona period from June 2019 to January 2020.
“The insolvency situation remains dynamic and will only continue to develop in the direction of further increasing numbers in the next few months,” said researcher Steffen Müller from the Halle Institute for Economic Research (IWH). In addition to the current difficult general conditions, the fact that Corona aid was paid more often to companies that were already unproductive before the crisis may also play a role.
Government support and a partially suspended obligation to file for insolvency had kept the number of company bankruptcies in Germany at a low level – despite the corona and energy crisis. Experts therefore expected an increase. In addition, the aid will now be repaid in a persistently difficult environment. “It is not surprising that this is overwhelming many weaker companies,” said Müller.
Traffic and storage were most affected
According to final results, the number of company bankruptcies rose by 23.2 percent to 16,264 cases from January to November last year. In November alone, the district courts reported 1,513 filed corporate insolvencies – 15.3 percent more than in November 2022. They put creditors’ claims in that month at around 1.5 billion euros.
Based on 10,000 companies, there were a total of 4.5 company bankruptcies in Germany in November. Most were in the transport and storage sector with 9.6 cases. This was followed by other economic services (such as temporary employment agencies) with 7.5 cases.
However, the number of consumer bankruptcies fell in November. It decreased by 1.0 percent to 5,811. For January to November 2023, this results in an increase of 1.1 percent to 61,460 cases.