The economy is weakening, but fewer companies have gone bankrupt recently. According to the Federal Statistical Office, around 3 percent fewer insolvencies were filed in January.
Despite the weak economy, there were no signs of bankruptcies in Germany at the beginning of the year. According to the Federal Statistical Office, the number of regular bankruptcies applied for fell in January by 3.2 percent compared to the previous month. In December 2022, on the other hand, the number of insolvencies had risen by 3.1 percent compared to the previous month.
The proceedings only flow into the statistics after the first decision of the insolvency court, explained the Wiesbaden statisticians. In many cases, the actual time of filing for insolvency is almost three months earlier. The insolvency statistics also only show business closures that take place in the course of insolvency proceedings, but not those for other reasons or before acute payment difficulties occur.
According to the final results, the district courts reported 1,312 company insolvencies in November – around a fifth more than in the same month last year. The expected claims of the creditors added up to almost 1.5 billion euros. Most bankruptcies were in construction and trade. The number of consumer bankruptcies fell by 5.8 percent in November compared to the same month last year.
No wave of bankruptcies in sight
The trend towards more company bankruptcies had solidified towards the end of the year. Rapidly rising energy prices, record inflation and consumers’ reluctance to spend are again forcing more companies to go out of business. However, experts do not see a wave of bankruptcies.
The influence of state aid programs on the insolvency process is decreasing, emphasized the Association of Insolvency Administrators and Trustees in Germany with a view to the corporate insolvencies opened in November. “It is becoming apparent that we will return to the insolvency level of 2019 without further state subsidies,” said VID chairman Christoph Niering. According to the association, corporate insolvencies in 2020, 2021 and 2022 were at a historically low level despite the economic crises.
Fewer companies in Germany feared for their existence due to easing concerns about a deep recession: Only 4.8 percent feared for their continued existence in January, the Ifo Institute reported in a recent survey. In December it was still 6.3 percent.
Source: Stern
