An estimated 205,000 jobs were affected. "More and more companies are collapsing under the constant pressure of high energy prices and the interest rate turnaround," said chief economist Patrik-Ludwig Hantzsch. The number of insolvencies will continue to rise significantly in the coming months in the difficult economic environment. "The number of cases has therefore almost normalized and the special effects from the coronavirus period have largely fizzled out," emphasized Hantzsch. "Compared to 2019, the general conditions for companies have worsened significantly, and the economic policy divergence is causing additional uncertainty."

Even though there were many major insolvencies in the retail (Gerry Weber, Ahlers, Peek&Cloppenburg), construction and healthcare sectors in 2023, insolvency activity has accelerated across the board, according to Creditreform. One reason for this is likely to be catch-up effects. Many companies that are now insolvent had been battling multiple crises such as coronavirus, inflation and a shortage of skilled workers for years. During the coronavirus period, state aid and the temporary suspension of the obligation to file for insolvency massively reduced the number of company bankruptcies - even though the economy went through a massive recession in 2020 in particular. There were just over 14,000 insolvencies in 2021, compared to around 18,800 in the pre-coronavirus year of 2019.

Creditreform has now recorded a significant increase in insolvencies in all sectors for this year. The number of cases rose the most in manufacturing (up 30.2 percent), followed by trade (up 26.0 percent). There was an increase of 20.8 percent in construction and 22.3 percent in service providers.

"SIGNA BANKRUPTCY SHOWS DIFFICULT SITUATION FOR DEVELOPERS"

According to Creditreform, the construction industry in Germany in particular is facing difficult times due to high interest rates, rising construction costs and the slump in demand. "The insolvency filing of Signa Real Estate Germany and ultimately the entire Signa Holding of main owner René Benko in Vienna show how difficult the situation has become for project developers and builders," it said. The failure of the billion-euro properties in prestigious locations has huge consequences for employees, contractors and creditors. "It is not yet clear which investors could become active."

According to Creditreform, the number of consumer insolvencies is largely stable due to the still good situation on the labor market. A total of 66,200 such insolvency proceedings were registered, compared to 65,930 cases in 2022. "Looking to the future, however, in view of the rather weak economic outlook and global risks, we can also expect rising figures in this area," said Hantzsch. Especially as the over-indebtedness situation of many citizens has deteriorated significantly.

The German economy stagnated at the beginning of 2023, grew minimally by 0.1% in the spring and shrank again by the same amount in the summer quarter. Many companies are still suffering from the consequences of the energy crisis, including high inflation, and are experiencing sluggish demand due to the weak global economy.

(Report by Klaus Lauer; Edited by Hans Busemann; If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets)).