In the last quarter, more German companies filed for bankruptcy than in 2010, shortly after the financial crisis. Financial aid from the Corona period facilitated this high.
The number of company bankruptcies continued to rise in September. In total, there were 1,303 insolvencies of partnerships and corporations, according to figures published today by the Leibniz Institute for Economic Research Halle (IWH).
That is two percent more than in the previous month and at the same time 28 percent more than in September 2023, as the Halle Institute for Economic Research (IWH) also announced. Insolvencies of larger companies alone caused 23,000 job losses in September.
The last time there were so many bankruptcies was after the financial crisis
A total of 3,991 companies filed for bankruptcy between July and September – the highest number of bankruptcies recorded in one quarter in the past 14 years.
The last time there were 4,071 bankruptcies was in the second quarter of 2010, as the researchers from Halle explained. At that time, the major economic and financial crisis of 2008/2009 was still having an impact.
The highest level can also be attributed to the corona pandemic
“Insolvency activity is currently at a significantly increased level,” said IWH expert Steffen Müller. The current value is 44 percent above the September average for the years 2016 to 2019, i.e. before the corona pandemic.
This plays a role due to catch-up effects, in addition to the current weak phase of the German economy. During the Corona crisis, many companies received government support, which is why bankruptcies were “artificially kept low,” explained the IWH.
According to IWH, many of the companies supported at the time are now running into difficulties. A prominent example in September was the opening of insolvency proceedings by the tour operator FTI Touristik. The company was temporarily saved from bankruptcy during the pandemic with government aid totaling almost 600 million euros.
Leading indicators indicate that the trend will continue
IWH expert Müller expects the number of insolvencies to continue to rise in the coming months. He refers to signs from leading indicators that the IWH observes.
For its analyses, the institute from Saxony-Anhalt evaluates the current insolvency announcements from the German registry courts and links them to the balance sheet figures of the affected companies.
