The volume of corporate insolvencies exhibited a minor decline in August.
Germany saw a minimal drop in corporate bankruptcies in August: 1282 firms requested insolvency, representing a 9% decrease from July's figure, according to the Leibniz Institute for Economic Research Halle (IWH). However, this figure indicates a 27% surge compared to August 2023 and a 37% increase compared to the typical August figure from 2016 to 2019. Three federal states, specifically Baden-Württemberg, Bavaria, and Saxony, reported significantly high bankruptcy numbers.
These three regions recorded their highest bankruptcy rates since the IWH insolvency trend began in January 2016, as per the institute's reports. Baden-Württemberg saw 163 bankruptcies, a 94% increase compared to the average from 2016 to 2019. Bavaria recorded 203 corporate bankruptcies (an 84% rise), and Saxony reported 52 bankruptcies (a 54% increase). The institute did not provide explanations for these figures.
The research institute analyses the current insolvency declarations made by German registry courts for monthly insolvency trends and correlates them to the affected companies' financial statements. Additionally, IWH gathers leading indicators that forecast the insolvency process by approximately two to three months.
Despite the 9% decrease in corporate bankruptcies in August compared to July, Germany still experienced a significant increase of 27% compared to the same month in 2023. But, it's worth noting that when compared to the typical August figures from 2016 to 2019, Germany saw a 37% surge in bankruptcies during that period.
