Number of corporate insolvencies rising at a slower pace
The insolvency wave among German companies is not over, but it's not growing as fast: According to preliminary data from the Statistical Federal Office, 6.3 percent more regular insolvencies were filed at German courts in June 2024 compared to the previous year. The increase was nearly 26 percent in May.
Whether these filings will lead to insolvency proceedings is determined by the courts within three months. The latest available figures show that there were 1,906 new proceedings in April of this year, a 33.5 percent increase compared to the previous year. The creditors' claims amounted to 11.4 billion Euros, compared to 1.3 billion Euros in the previous year's month. Particularly large insolvency proceedings were initiated.
On average, 5.5 insolvencies were filed per 10,000 companies in April. The industries with the highest insolvency risk were Transport and Storage (10.1) and Construction (8.5). The hospitality industry also had a higher insolvency risk (7.4). The number of personal insolvencies also rose significantly in April: They increased by 27.9 percent to 6,277 cases.
Experts estimate that the number of corporate insolvencies in Germany will reach around 20,000 in the current year. Due to the Corona years, high energy prices, and rising interest rates, more and more companies in Germany are finding themselves in financial difficulties. In addition, exceptional regulations enacted by the government to prevent an insolvency wave during the pandemic have expired.
The Statistical Federal Office had counted 17,814 company insolvencies for 2023. This was a relatively low number compared to the long-term perspective: In 2009 during the financial and economic crisis, nearly 33,000 companies in this country had slipped into insolvency.
The number of company insolvencies predicted to occur this year is around 20,000, which is a significant increase due to factors such as the Corona pandemic, high energy prices, and rising interest rates. Despite the rising number of insolvency filings, not all of them will result in insolvency proceedings, as the courts have three months to determine this.
