The number of company bankruptcies rose to the highest level in more than 20 years in the first quarter. As the Leibniz Institute for Economic Research Halle (IWH) announced, 4,573 insolvencies of partnerships and corporations were recorded in Germany in the first three months of this year. The last time the number of insolvencies was higher was in the third quarter of 2005, according to data from the Federal Statistical Office. At that time there were 4,771 insolvencies of partnerships and corporations.
The IWH announced that the number of insolvencies was higher than in the wake of the 2009 financial crisis. Bankruptcies increased surprisingly significantly in March. They were therefore 71 percent above the average March from 2016 to 2019 – i.e. before the corona pandemic. The highest values ever measured were recorded last month in, among other things, the construction industry and retail. There were regional highs in Bavaria, Baden-Württemberg and North Rhine-Westphalia.
IWH: Trend could continue
With its insolvency trend, the IWH regularly looks at insolvencies of larger partnerships and corporations, but does not, according to its own information, record small companies that are of little relevance to the economy as a whole.
According to the information, fewer employees were affected by bankruptcies in March this year than in February and March last year. The strong growth is therefore due to an increase in bankruptcies among smaller companies. The institute also expects high numbers for the coming quarter. The leading indicators leave little room for optimism, said the head of insolvency research, Steffen Müller. “It is possible that the very high values from March will be repeated.”
The IWH had already recorded the highest number of insolvencies in a year since 2005 for last year.
