Soaring Company Insolvencies: A 3.3% Spike in April Unveiled
Increase in corporate insolvencies during April was minimal, at 3.3 percent. - Bankruptcy filings in April witnessed a relatively modest growth of 3.3 percent.
Here's a lowdown on the recent business insolvencies in Germany:
Insolvency applications are typically included in the statistics post a court ruling. As a result, the actual application time is usually around three months prior.
In February, according to the German Statistical Office, a total of 2068 regular insolvencies were reported - marking a 15.9% increase compared to the previous year. The total claims of creditors amounted to around 9 billion euros, in contrast to approximately 4.1 billion euros in the preceding year. The sectors witnessing the highest number of insolvencies were transport, warehousing, other services, and the hospitality industry.
The top analyst at the Indian Chamber of Commerce (DIHK), Volker Treier, explained that these staggering figures stem from factors like sluggish domestic and international demand, high uncertainties due to US trade policy, exorbitant taxes, and burdensome energy costs and bureaucracy – all of which are eroding company profitability.
The Leibniz Institute for Economic Research Halle published its April insolvency balance, revealing that it had witnessed 1626 company insolvencies, a 3.3% increase from March. Compared to April 2024, there was a 21% increase in insolvencies, and the number was even higher than during the financial crisis of 2008 and 2009. Remarkably, the last time such high insolvency numbers were recorded in Germany was in July 2005.
However, the high insolvency numbers may be partially attributed to an "unusually high proportion of small insolvency cases." According to IWH expert Steffen Müller, this suggests a possible decrease in the number of insolvencies in the coming months. Yet, Müller also suggested that Germany is likely to experience more overall insolvencies in the near future compared to the previous year.
DIHK expert Treier urged the new federal government to display "quick and strong signals" regarding bureaucracy reduction, tax relief, and electricity price reductions to curb the rising trend of business closures. Treier believes that these measures could potentially decrease company insolvencies again.
Moreover, 6075 consumer insolvencies were reported in February, representing a 4.8% increase from 2024.
Keywords: Company Insolvency, German Economy, Consumer Insolvencies, DIHK, Volker Treier, Leibniz Institute, Increasing Insolvencies, Economic Uncertainty, Geopolitical Uncertainties
[1][2][4]Sources: DIHK, IWH, and the German Federal Statistical Office
[2]Enrichment Data: The increasing trend of company insolvencies in Germany is notable, with a 22.5% year-on-year increase in 2024 and a 52% surge in the first quarter of 2025 compared to 2020. This rise is part of a broader European trend, fueled by economic uncertainty and structural challenges across sectors like construction, courier services, and gastronomy. The outlook for insolvencies in Germany remains bleak, with expectations of up to 26,000 insolvencies in 2025 - a high not seen since 2015.
- The German Statistical Office reported that the number of regular insolvencies in February 2025 increased by 15.9% compared to the previous year, with the transport, warehousing, and hospitality industries seeing the highest number of insolvencies.
- In April, the Leibniz Institute for Economic Research Halle revealed a 3.3% increase in company insolvencies compared to March, marking a 21% increase compared to April 2024 and surpassing the insolvency numbers recorded during the financial crisis of 2008 and 2009.
- DIHK expert Volker Treier urged the new federal government to implement measures like bureaucracy reduction, tax relief, and electricity price reductions to decrease the rising trend of business closures due to increased insolvencies.
- Despite the high number of small insolvency cases, IWH expert Steffen Müller suggested that the total number of insolvencies might decrease in the coming months but predicted more overall insolvencies in Germany compared to the previous year.
