Economic weakness: Ifo: German companies’ fear of survival is rising again

Almost every fourteenth company currently sees its existence threatened. 7.3 percent of the companies surveyed expressed this in a survey by the Munich Ifo Institute in October. That is 0.5 percentage points more than a year earlier and 2.5 percentage points more than at the beginning of 2023. In the past crisis years, however, there were also significantly higher values ​​- from 13.7 at the beginning of 2022 to 21.8 percent in the hot phase the Corona crisis in mid-2020, as can be seen from previous publications by the Ifo.

The head of the Ifo surveys, Klaus Wohlrabe, still sees the current increase as negative. “The steady rise in corporate insolvencies is likely to continue,” he says. “In addition to a lack of orders, the increasing international competitive pressure is causing many companies such problems that they see their future in acute danger.” The number of corporate bankruptcies is already significantly higher than in previous years.

According to the survey, the current increase in existential concerns is due, among other things, to the manufacturing industry. Here, 8.6 percent of companies report profound economic problems, which is 2.2 points more than in October 2023. Concern has also increased significantly in retail: 13.8 percent of companies see their economic existence threatened, 3 .5 points more than a year ago. In the construction industry, however, the share fell from 8.9 to 7.9 percent despite the crisis in housing construction. There was also some relaxation in the service sector. After 6.8 percent in the previous year, 5.8 percent of companies now see massive economic problems.

There is a difference here compared to the high values ​​of the past: in 2020 and 2021 and the beginning of 2022, service providers and retailers in particular drove the values ​​up.