Economic situation - Bremen has the highest insolvency rate in Germany
A weak economy, high energy prices and increased interest rates are driving up the number of company bankruptcies, especially in Bremen. According to estimates by the credit agency Creditreform, the smallest federal state in relation to its size will have the highest insolvency rate of all 16 states this year and thus displace Berlin from the top spot on the negative list. This is according to the Creditreform report "Insolvencies in Germany" presented in Frankfurt on Monday.
With 120 insolvencies per 10,000 companies, the figure in the two-city state is twice as high as the national average, which is only 60. With 52 insolvencies per 10,000 companies, Lower Saxony is in tenth place among the 16 federal states. The most prominent example from Bremen was the care home operator Convivo, which filed for insolvency in January. Most of the 77 care homes in several federal states were continued by new operators. According to the insolvency administrator, the majority of the group's approximately 5,000 employees were taken on.
In Lower Saxony, the bankruptcy of the shoe retail chain Reno from Osnabrück at the beginning of March caused quite a stir. Around a sixth of the 180 stores nationwide were taken over by competitor Kienast from Wedemark in the summer, which is continuing to operate them under their old name. Kienast already operates chains such as ABC Schuh-Center, K+K Schuh-Center and Street Shoes.
In terms of the insolvency rate determined by Creditreform, the city-states are traditionally well ahead of the larger states. Behind Bremen and Berlin (103 insolvencies per 10,000 companies), Hamburg follows in third place again this year with 81. The three city states had already occupied the top three places last year, but Bremen and Berlin have now swapped places. Thuringia has the lowest rate this year with 40 insolvencies per 10,000 companies. The experts at Creditreform point to the different industry structures and the age of the companies as the reason for the strong regional differences.
Overall, the number of insolvencies has increased significantly this year. According to Creditreform estimates, 18,100 companies throughout Germany will have filed for insolvency by the end of the year. According to the calculations, this would be 23.5 percent more than in the previous year. The increase is particularly marked in Bremen: in 2022, Creditreform had only counted 72 insolvencies per 10,000 companies there, but now there are 48 more. In Lower Saxony, the figure in 2022 was 45, 7 fewer than expected in 2023.
"More and more companies are collapsing under the constant pressure of high energy prices and the interest rate turnaround," explained Patrik-Ludwig Hantzsch, Head of Creditreform Economic Research, on Monday in Frankfurt at the presentation of the figures. This will not change in the near future. "In these difficult economic conditions, the number of insolvencies will continue to rise significantly in the coming months," said Hantzsch.
According to the Creditreform expert, the number of cases has almost normalized and the special effects from the corona period have largely evaporated. In order to avert a wave of bankruptcies as a result of the pandemic, the state had granted temporary exemptions. In 2022, insolvency figures had already risen again for the first time since the 2009 economic crisis.
Creditreform press release
Read also:
- Despite the national average of 60 insolvencies per 10,000 companies, Bremen, driven by its economic situation, is expected to have the highest insolvency rate in Germany this year, according to Creditreform's report.
- To combat the rising number of insolvencies in Bremen, Creditreform suggests that companies should closely monitor their credit situations and seek assistance from credit reference agencies like Creditreform.
- Frankfurt, being a prominent financial hub, served as the venue for the presentation of Creditreform's "Insolvencies in Germany" report, revealing the expected increase in insolvencies nationwide, particularly in Bremen.
- In the city of Hanover, located in Lower Saxony, several companies have faced insolvency challenges amidst the economic uncertainty, highlighting the widespread impact of high energy prices and interest rates.
- The credit reference agency Creditreform, based in Berlin, has been closely monitoring the economic situation, identifying trends, and providing insights to help companies manage their financial risks.
- In a bid to address the insolvency crisis in Germany, particularly in Bremen and Lower Saxony, regional authorities and industry bodies are engaging in discussions to develop strategies that promote economic growth and financial stability.
- Frankfurt's stock exchange is a potential venue for companies in financial distress, such as those in Bremen and Lower Saxony, to seek investment or restructuring opportunities, as the ongoing insolvencies in the two regions demonstrate the necessity of exploring such avenues.
Source: www.stern.de
