Expensive energy, expensive material
Company bankruptcies are increasing
06/29/2023, 2:28 p.m
For years, the number of corporate insolvencies has been falling, now the turnaround. In addition to the increased costs, poor consumer sentiment is having a negative impact. The Corona crisis is still taking revenge. The number of affected employees is increasing massively.
The number of corporate insolvencies in Germany is increasing again significantly. The credit agency Creditreform registered 8,400 bankruptcies in the first six months of this year. This means an increase of 16.2 percent compared to the first half of 2022. According to the experts, there was a higher percentage increase in 2002. And there is no improvement in sight. “A further increase in insolvencies is to be expected,” the experts predicted.
“The enormous cost burdens caused by excessive energy and material prices are having an effect. After years of falling insolvency figures, the trend has reversed,” said Patrik-Ludwig Hantzsch, head of Creditreform economic research. Despite the significant increase in cases, it is more a matter of normalization than a “wave of bankruptcies,” said the expert. The poor consumer climate also contributed to the development. “Inflation unsettles consumers and slows down the mood to buy significantly,” said Hantzsch. For many companies, the state funds that were generously distributed during the Corona crisis, which are now due to be repaid, would also be a problem.
According to Creditreform, medium-sized and large companies have also found themselves in crisis more frequently than usual in recent months, so that the number of employees affected by the bankruptcy of their employers has risen disproportionately – from 68,000 in the first half of 2022 to an estimated 125,000 in the first six months of this year. “Global crises such as the pandemic or energy price inflation have a more direct and immediate impact on larger companies,” Hantzsch explained the development.
Personal bankruptcies are also likely to increase
By contrast, the number of consumer insolvencies in the first half of the year was 33,200, the same level as in the previous year. “The energy crisis and inflation have not yet had a noticeable impact on the number of consumer bankruptcies,” said Hantzsch. One reason for this is that the labor market has so far proven to be robust despite the current recession. In addition, consumer bankruptcies only reacted with a delay to a deterioration in the economic situation.
However, the expert also expects the situation in the case of consumer bankruptcies to deteriorate noticeably by next year at the latest. Consumers’ fear of not being able to pay for everyday costs is already significantly greater than it was a year ago. For the rest of the year, the credit agency expects the situation to worsen further. “The general economic conditions for companies remain very tense due to inflation and the turnaround in interest rates,” said Hantzsch. “The number of payment defaults could even accelerate in the coming months.”
Creditreform is not alone in this assessment. The credit insurer Allianz Trade also expects a significant increase in company bankruptcies this year. According to a study published in April, he expects around 17,800 corporate insolvencies in the current year – a good 22 percent more than in the previous year. According to the experts, an important reason for this is the more restrictive lending by financial institutions that was observed after the bank turbulence in the spring. But even Allianz Trade does not like to talk about a wave of bankruptcies. After all, the number of cases in Germany was recently at a historically low level.