Germany’s Company Insolvencies Rise to Highest Since 2009

BERLIN (Reuters) – The last quarter of 2024 saw Germany record its highest number of company insolvencies since 2009, according to a study from the Halle Institute for Economic Research (IWH) on Thursday.

The report indicates that there were 4,215 company insolvencies, affecting nearly 38,000 jobs, a level not seen since the financial crisis of mid-2009.

Compared to the fourth quarter of 2023, the insolvency count increased by 36%.

The IWH attributes this troubling trend partially to the ongoing economic crisis, rising energy costs, and wage increases.

Steffen Mueller, head of insolvencies research at IWH, stated, “Years of extremely low interest rates have prevented insolvencies, and during the pandemic, insolvencies have failed to materialize due to subsidies such as short-time work benefits.” He explained that the rise in interest rates and the end of subsidies have resulted in a backlog of insolvencies dating back to 2022.

Among different sectors, the services sector experienced the most significant increase in insolvencies, rising by 47% year-on-year, while the manufacturing sector saw a growth of 32%.