The German economy is shrinking, and industrial companies in particular are increasingly taking the difficult step of filing for bankruptcy. The Halle Institute for Economic Research does not expect the trend to reverse.
According to the Halle Institute for Economic Research (IWH), the number of corporate bankruptcies rose by a third to 1,406 in July, the highest level in about ten years. In the largest 10 percent of these companies, almost 10,000 jobs were affected. The significant increase in the number of insolvencies affects all sectors, but is particularly strong in industry: after 100 industrial companies filed for bankruptcy in June, 145 filed for bankruptcy in July.
The head of IWH insolvency research, Steffen Müller, said: “We expect the number of insolvencies to fall slightly in August and then rise again in September.” This means that the number of insolvencies is likely to continue to be consistently above the level before the corona pandemic. The institute evaluates the current insolvency announcements of the German registry courts and links them with balance sheet figures of the companies affected.
Source: Stern
