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As many company bankruptcies as last time in 2015

The economic crisis has led to significantly more bankruptcies in Germany. The number of bankruptcies has increased by around a quarter compared to the previous year. Some large companies have also recently been affected.

The permanent economic downturn in Germany has led to more company bankruptcies this year than in almost a decade. As calculations by the credit agency Creditreform showed, the number of bankruptcies may have increased by 24.3 percent to 22,400 compared to the previous year. The last time there was a higher number was 23,180 cases in 2015. “With some delay, the crises of recent years are now having an impact on companies as bankruptcies,” said the head of Creditreform economic research, Patrik-Ludwig Hantzsch.

Other experts had also predicted a significant increase in company bankruptcies for 2024. Weakened by the Corona years, high energy prices and increased interest rates, more and more companies are getting into difficulties. In addition, exemptions with which the state tried to avert a wave of bankruptcies during the pandemic have expired.

“The economic policy standstill and declining innovative power have weakened Germany as a business location,” said the Creditreform expert. A further increase can therefore be expected in the coming year. “This means that insolvency figures close to the highs of 2009 and 2010 could soon be in sight again, when over 32,000 companies went bankrupt,” said Hantzsch.

All industries affected

Bankruptcies increased in all sectors of the economy. According to the information, service providers were particularly affected with an increase of 27.1 percent, followed by the manufacturing industry with 23.9 percent. The highest insolvency rate, measured in terms of insolvencies per 10,000 companies, was in the construction industry at 97.

According to the information, the majority of bankruptcies in the past year affected micro-enterprises with a maximum of ten employees. These accounted for 81.4 percent of all cases. What is noticeable, however, is the above-average increase in larger companies with more than 250 employees. The number of cases here increased by 44.4 percent. “Their share of insolvency volume remains small, but the consequences of major insolvencies are significant: high levels of bad debts and job losses,” said Creditreform managing director Bernd Bütow.

The amount of damage increased significantly

The increase in so-called “chain bankruptcies” is particularly worrying. The ongoing crises of the past few years, from Corona to inflation, have exhausted numerous companies and are now promoting this dynamic.

The analysis also shows a significant increase in creditor losses. The estimated damage amount is 56 billion euros, after 31.2 billion last year. The number of jobs threatened or lost is likely to rise from 205,000 to around 320,000. Major bankruptcies such as those of Galeria Karstadt Kaufhof and FTI Touristik would have contributed to this.

High costs also burden consumers

The number of consumer bankruptcies also increased in 2024, according to Creditreform. A total of 72,100 new procedures were registered, an increase of 8.5 percent. The main reasons for this are the sharp rise in the cost of living and higher loan interest rates, which put a considerable burden on consumers. The situation is further exacerbated by the increasing reduction in well-paid jobs.

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