Prior to the Turnaround, Fewer Bankruptcies Show Significant Growth - Rise in Insolvency Cases Shows Only Slight Growth
Does the increase in corporate insolvencies in Germany signal a turning point? The Federal Statistical Office reported a modest 3.3% increase in insolvency proceedings in April 2025 compared to the same period in 2024. Yet, this could be the beginning of a more significant surge.
Experts predict that the number of insolvencies will keep climbing this year, following a record high of 21,812 cases in 2024—the highest since 2015. It's worth noting that the number of insolvencies during the financial and economic crisis in 2009 peaked at 32,687 cases.
April 2025 marks the second consecutive month with a single-digit growth rate, contrasting the seven months of double-digit increases preceding it. However, the proceedings counted in the statistics commence after the initial insolvency court decision, typically three months prior to the recording, the office emphasizes.
A Significant Increase in February
February's numbers saw a significant rise: Local courts reported 2,068 corporate insolvencies, up by 15.9% compared to a year ago. The value of claims against creditors amounted to around 9.0 billion euros, as compared to approximately 4.1 billion euros in the same month the previous year.
Volker Treier, the chief analyst of the German Chamber of Industry and Commerce, notes that such trends call for strong actions from the federal government to arrest the upward trajectory of business failures. Measures like tax cuts, higher depreciation, and bureaucratic simplification could help, according to Treier.
In February, six corporate insolvencies occurred for every 10,000 companies, primarily affecting the transport and logistics, temporary work, and hospitality sectors. Consumer insolvencies, on the other hand, saw only a slight increase: up by 4.8% to 6,075 cases.
Record Insolvencies Since the Financial Crisis?
The challenges facing companies are numerous: escalating energy costs, copious bureaucracy, political flux, and consumer caution. Additionally, exceptional regulations designed to prevent an insolvency wave during the pandemic have expired.
Looking beyond legal entities, data from the Halle Institute for Economic Research (IWH) claims that the total number of insolvencies in Germany has reached its highest level in 20 years as of 2025. April witnessed a 10% increase in insolvencies of both natural and legal persons compared to the prior month and a 21% increase compared to a year ago. These figures surpassed those observed during the financial crisis in 2008/2009.
Stay tuned for updates on the evolving insolvency landscape in Germany. Strengthening economic measures may be on the horizon to counteract this growing trend.
- To counteract the rising trend in corporate insolvencies in Germany, Volker Treier, the chief analyst of the German Chamber of Industry and Commerce, suggests strong actions from the federal government, such as tax cuts, higher depreciation, and bureaucratic simplification.
- Experts predict that the number of insolvencies will keep climbing in 2025, following a record high of 21,812 cases in 2024, marking the highest level since 2015.
- In addition to corporate insolvencies, data from the Halle Institute for Economic Research (IWH) indicates that the total number of insolvencies in Germany has reached its highest level in 20 years as of 2025, surpassing those observed during the financial crisis in 2008/2009.
- Applications for vocational training programs could potentially help address the ongoing business challenges in various sectors like transport and logistics, temporary work, and hospitality that are significantly affected by corporate insolvencies.