The number of bankruptcies in July surpassed all records
The number of corporate insolvencies in Germany surged unexpectedly in July, reaching a record high. Last month, 1406 companies filed for insolvency, according to the Leibniz Institute for Economic Research Halle (IWH). This was the highest number in about a decade and exceeded the recent peak in April 2024. The number of insolvencies had decreased in May and June.
Compared to the previous month of June, the number of insolvencies increased by 20 percent, according to IWH. Compared to July 2023, the increase was 37 percent. Compared to the July average of the years 2016 to 2019, before the COVID-19 pandemic, the current number was 46 percent higher.
The significant increase in insolvencies affects all sectors, according to IWH, but is particularly pronounced in the manufacturing industry. After 100 insolvent industrial companies in June, which also corresponded to the average of the last twelve months, the number in July was 145. "This is a new record since the IWH insolvency trend began recording industry information in January 2020," the institute explained. The states of Berlin, Hesse, and North Rhine-Westphalia were particularly affected.
The IWH evaluates the current insolvency announcements of the German registry courts for its monthly insolvency trend and links them to balance sheet figures of the affected companies. For this purpose, the institute collects leading indicators that precede the insolvency process by two to three months.
The increase in insolvencies especially in the manufacturing industry is particularly pronounced, with 145 insolvent industrial companies in July, significantly surpassing the June average of 100. The surge in insolvencies in July, reaching a record high, is also higher than the July average from 2016 to 2019 by 46%.
