- Increase in bankruptcy filings observed prominently at the year's start
In these challenging economic times, an increase in business bankruptcies is becoming increasingly common. Even in January, this trend continued, with the Federal Statistical Office reporting a 14.1% surge in insolvency proceedings compared to the previous year. It's essential to note that these proceedings only become official after the first decision by the insolvency court, which often occurs three months prior to the recorded date.
November, for which we have more definitive data, saw an even more significant jump. With 1,787 corporate insolvencies filed, the number was 18% higher than the same period the year before. The total debts owed to creditors amounted to approximately 2.8 billion euros, a substantial increase from the previous year's 1.5 billion euros.
The transport and logistics, construction, and hospitality sectors were particularly affected, with 5.2 insolvencies per 10,000 companies in November. On the other hand, consumer insolvencies only saw a slight increase, rising by 2.8% to 5,971.
The economic information agency Creditreform predicts that this trend will continue, with approximately 22,400 corporate insolvencies expected in 2024. This would represent the highest number since 2015. In fact, 2025 could potentially see even more insolvencies than during the 2009 global financial crisis, with over 32,000 cases.
Compounding the issue, numerous challenges face businesses today. Expensive energy costs, bureaucratic hurdles, political uncertainty, and consumer restraint are just a few. Additionally, exemptions introduced to prevent a wave of insolvencies during the COVID-19 pandemic have now expired.
As for the consumer sector, factors such as economic uncertainty, diminishing income confidence, and rising food and energy prices are negatively impacting consumer sentiment. Job security concerns and industrial layoffs are further dampening morale, leading to a sluggish economic recovery.
Structural challenges, geopolitical uncertainties, and rising global protectionism are putting sustained pressure on Germany's economy. The country is trailing behind leading nations in digitalization and electric vehicles, exacerbating productivity issues. Geopolitical tensions, high interest rates, potential trade tariffs, and regulatory delays are additional factors contributing to these trends.
In conclusion, the current economic climate is leading to a rise in corporate and consumer insolvencies in Germany. While there are various contributing factors, understanding these challenges is crucial for both businesses and consumers alike.
The prediction by Creditreform indicates that corporate insolvencies could reach an all-time high since 2015, with around 22,400 cases filed in 2024. These figures might even surpass the records set during the 2009 global financial crisis, with over 32,000 cases anticipated for 2025. By 2024, the statistical data on insolvencies could paint a grim picture, potentially revealing an increase in company bankruptcies.
Furthermore, looking beyond the corporate sector, 2024 could also witness a significant rise in consumer insolvencies due to factors like economic uncertainty, diminishing income confidence, and rising food and energy prices. By analyzing these statistical trends, we can anticipate a potential wave of insolvencies, both among companies and consumers, in the near future.
Given the multitude of challenges facing businesses today, including expensive energy costs, bureaucratic hurdles, and the expiration of COVID-19 exemptions, it's plausible that the number of companies filing for bankruptcy could hit record levels by 2024, according to statistical predictions.
