Significant increase in corporate bankruptcies in Germany.
According to the German newspaper “Handelsblatt”, official statistics show that the number of corporate bankruptcies has reached its highest level in the last three years. Accordingly, most of the bankrupt companies are located in one of the federal states of northern Germany.
Despite the improving economic outlook in Germany, the number of corporate bankruptcies in the country has reached its highest level in almost three years, according to a study.
The number of corporate bankruptcies in March was higher than at any time since May 2020, according to an analysis published Thursday by the Leibniz Institute for Economic Research (IWH).
Accordingly, last month, 959 bankruptcy cases were registered, which is 15% more than in February, and compared to March 2022, it has even increased by 24%. This means that the number of bankruptcies is only four percent lower than the average March in the years before the corona pandemic.
Stephen Mueller, head of IWH’s Structural Change and Productivity Department and Bankruptcy Research based there, said: “The time of publishing abnormally low corporate bankruptcy numbers is over for now. Higher production costs due to the high cost of energy and materials, increased personnel costs, and a significant increase in interest rates are currently weighing on many companies.
At the same time, Mueller said: But our main indicators do not point to a further increase in the number of bankruptcies in the coming months. One of the reasons for this could be that a prolonged recession will not materialize in Germany. In their joint forecast for the federal government, the leading institutions now forecast modest growth for the first quarter and for the whole year.
The results of the survey show that most corporate bankruptcies were again in the state of North Rhine-Westphalia with 213 cases. Therefore, the biggest increase in bankruptcies was in Schleswig-Holstein: in the first three months of this year, bankruptcies there were more than 60% higher than the average for 2022.
According to an IWH analysis, 8,000 jobs were affected at the top ten percent of companies that filed for bankruptcy in March.
The German Federal Statistical Office in Wiesbaden also collects bankruptcy figures. In mid-March, the authority announced that district courts had reported 14,590 corporate bankruptcies last year.
