The wave of bankruptcies has been rising for months
Corporate bankruptcies again at record levels in April
May 7, 2024, 2:11 p.m
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A wave of bankruptcies has been building steadily in Germany since the beginning of the year. According to a study, in April it reached a new high with 1,367 declared bankruptcies. Economic researchers will not give the all-clear until the middle of the year.
According to a study, the number of company bankruptcies in Germany rose to a record high in April for the third month in a row. The insolvencies of partnerships and corporations totaled 1,367, as the Leibniz Institute for Economic Research Halle (IWH) announced. This exceeded the previous record value from March by five percent. This means that the number of jobs affected is “extraordinarily high”, also due to the insolvency of Galeria Karstadt Kaufhof, explained the IWH. However, the end of the wave of insolvencies is in sight.
According to the information, the current value is 47 percent higher than in April 2023 and 40 percent above the April average from 2016 to 2019, i.e. the years before the corona pandemic. “Highs were reached in numerous sectors, including in particular in the construction sector, in trade, in the service sector, but also in smaller sectors such as information and communication,” it said.
According to the IWH analysis, around 34,000 jobs were affected in the ten percent of the largest companies whose insolvency was reported in April alone. That is three times as much as in the previous month. Since the survey began in 2016, the number of affected jobs was only higher in July 2020. “One reason for the high number of jobs affected is the renewed insolvency of Galeria Karstadt Kaufhof,” it said. However, it is now clear that the department store group will be continued by new investors and that the vast majority of the jobs will be retained.
The IWH collects early indicators that lead the insolvency process by around two to three months. In April the values were at their lowest level in six months, said the head of the IWH structural change and productivity department, Steffen Müller. “While the currently exceptionally high number of bankruptcies is worrying, the early indicators clearly point towards relaxation,” said Müller. “I assume that the number of insolvencies will fall again from May, but at the latest from June.