The corona pandemic has made many companies in Germany difficult. Payment behavior has not suffered as a result – on the contrary.
Despite the corona pandemic, companies in Germany met their payment obligations with unusual reliability in the past year.
The failure rate fell to a historic low of 1.14 percent in 2020, the credit agency Creditreform Rating reported on Monday. The market observers rate insolvency proceedings and non-fulfillment of payment obligations as default.
The decline was “due to the extraordinary economic and financial response of the federal government during the pandemic,” it said. The temporary suspension of the obligation to file for bankruptcy played a major role in this context.
Creditreform expects a rather subdued development in default rates in the current year as well. “This is due on the one hand to ongoing government support measures, on the other hand to the noticeable economic recovery,” said Creditreform expert Benjamin Mohr. However, there is an extremely high level of uncertainty in all economic forecasts.
Big companies don’t have role models
Contrary to the significant reduction in failures at the macroeconomic level, the situation for medium-sized and large companies is somewhat different, according to the study. The failure rates among medium-sized companies (from 50 million euros in sales) and among large companies with annual sales of at least 250 million euros would have increased significantly, mainly due to payment arrears.
The basic materials industry, which includes the chemical and energy industries, has the lowest risk of failure. Despite the declines, the highest risk of failure still exists in the transport and logistics sector. In the case of consumer-related service providers, the failure rates have fallen significantly.
Companies in the eastern German states tend to be less at risk of failure than companies in the western German states. As in previous years, Thuringia led the ranking with a view to the lowest risk of default, closely followed by Saxony. Berlin had the highest average failure rate of all countries at 1.75 percent in 2020. In rural regions, the risk of failure is still lower than in cities and metropolitan areas.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
