Germany sees company bankruptcies soar

Business Friday 14/June/2024 17:31 PM
By: DW
Germany sees company bankruptcies soar

Berlin: Germany's Federal Statistical Office (Destatis) on Friday said 5,209 companies filed for bankruptcy in Germany in the first three months of 2024 — with the trend expected to continue.

Experts think the number of corporate insolvencies in Germany will increase to about 20,000 cases this year as part of a longer-term pattern.

The latest figure means corporate insolvencies are up 26.5% compared with the first quarter of 2023.

They are also 11.2% more than in the first quarter of 2020 when 4,683 corporate insolvencies were filed before the COVID-19 pandemic had its full impact. The coronavirus pandemic period itself saw special, temporary regulations introduced and low insolvency rates.

The transport and warehousing sector accounted for most insolvencies per 10,000 companies, with 29.6 cases at the start of 2024.

This was followed by the construction industry with 23.5 cases, and other economic services such as employment agencies on 23 cases. Manufacturing saw 20.3 insolvencies per 10,000 companies.

Local courts estimated the creditors' claims from the corporate insolvencies until the end of March was about €11.3 billion compared with €6.7 billion last year.

There were also 17,478 consumer bankruptcies in the first quarter of 2024 — an increase of 4.8% compared to the period in 2023.

Last year, Destatis figures showed that insolvency applications rose by 22.4% in October 2023 as compared to October 2022.

Exports from Germany last appeared to accelerate in figures released on Friday, boosting hopes that Europe's largest economy has emerged from a downturn.

However, Carsten Brzeski, the chief economist of Dutch bank ING in Germany, described the figures as "another cold shower for optimists."

Germany's export-orientated economy was particularly hard hit in recent years by a slowdown in the global economy, temporarily high energy prices, and rising interest rates.