The number of corporate insolvencies has risen sharply | free press

2023-08-11 17:28:24

Thanks to the suspended obligation to file for insolvency during the pandemic and state aid, only a few companies have gone bankrupt in recent years. Now the number is growing significantly.

Wiesbaden.

The number of corporate insolvencies in Germany continues to rise sharply. In July, almost a quarter (23.8 percent) more companies applied for standard insolvency proceedings than in the same month last year, as the Federal Statistical Office announced on Friday in Wiesbaden according to preliminary information. This continued the upward trend of the past few months. Already in June there was an increase of 13.9 percent. Many companies are struggling with the economic downturn, high costs for energy and materials, for example, and increased borrowing costs due to the rise in interest rates. But experts don’t see a wave of bankruptcies.

The Federal Statistical Office emphasized that the standard insolvency proceedings only flow into the statistics after the first decision of the insolvency court. Therefore, the actual time of the insolvency application is in many cases around three months earlier.

The situation in May

Final figures are available for May. In the month, the German district courts reported 1,478 corporate insolvencies, 19 percent more than in the same month last year. The local courts put the claims of the creditors at almost 4 billion euros. According to the Federal Statistical Office, that was almost twice as much as in May 2022 with almost 2.2 billion euros. There were also 5,679 consumer bankruptcies this May, down 3.7 percent from a year earlier.

Most insolvencies per 10,000 companies were in the transport and warehousing sector with 8.7 cases, followed by other economic services, such as temporary employment agencies, with 7.4 cases. There were fewer insolvencies in the energy supply sector.

“Despite the significant increase in corporate insolvencies in July, we are not seeing the often-mentioned wave of insolvencies,” said Christoph Niering, chairman of the professional association of insolvency administrators and administrators in Germany (VID). The insolvency situation was significantly softened by the state during the pandemic, and normalization can now be observed above all – starting from a low starting point, as the association emphasizes. “The numbers are still below the values ​​of the economically good year 2019.”

The federal government had partially suspended the obligation to file for insolvency during the corona pandemic in order to prevent a wave of bankruptcies. This and large-scale state aid had kept the number of company bankruptcies at a low level in recent years – despite the pandemic and energy crisis. Since August 2022, the number of corporate insolvencies has been increasing again. Experts had expected an increase for the current year, partly because many companies are facing the repayment of corona aid.

Niering does not see the current figures as an indicator of a long-term increase in insolvencies, but catch-up effects. Many of the companies now affected by bankruptcy would have been in trouble before the pandemic. “Due to the large number of state aids during the pandemic and the Ukraine war, these companies only stopped their entry into insolvency. Now we are seeing the market shakeout that goes hand in hand with insolvency.”

The Leibniz Institute for Economic Research Halle (IWH) had already determined high insolvency figures for July on Thursday. In the course of the bankruptcies reported in the month, around 9,300 jobs were affected in the largest ten percent of companies alone, especially in industry and trade.

Bankruptcies in the fashion and shoe trade

In the past few months, bankruptcies of well-known names had increased, especially in the fashion and shoe trade. The industry is suffering from consumers’ reluctance to spend in times of inflation. The shoe store chain Reno had to file for insolvency, and insolvency proceedings under self-administration were opened for the Hallhuber fashion chain at the end of July. And in March, the fashion retailer Peek & Cloppenburg Düsseldorf sought rescue in protective shield proceedings.

“Closings of large employers lead to high and permanent wage losses for employees,” warns the IWW. However, the institute is confident about the coming months. IWH insolvency expert Steffen Müller believes that the latest high figures have marked the temporary end of the rise in insolvencies. “For the months of August and September we do not expect any significant increase in the number of insolvencies.”

According to earlier information, the credit insurer Allianz Trade expected a significant increase in company bankruptcies this year by 22 percent. In the wake of the banking turmoil in the spring, financial institutions had become more restrictive in lending. Allianz Trade did not see a wave of bankruptcies either. The number of cases is likely to remain five percent below the level before the 2019 pandemic. (dpa)