Expert warns: Company bankruptcies are increasing due to high energy and material costs

The number of corporate bankruptcies is increasing due to high energy and material costs, even in industries that were normally considered stable.

The order situation has not completely eased in mechanical engineering eitherPhoto: Stefan Puchner/dpa

BERLIN taz| The number of company bankruptcies will increase significantly this year. The insurance industry assumes this. “Insolvencies are increasingly affecting sectors that were long considered safe,” said Thomas Langen, chairman of the Credit Insurance Commission of the German Insurance Industry Association. This applies, for example, to mechanical engineering, the chemical industry and the healthcare sector. “One reason for this is the enormous burden caused by high energy and material prices,” said Langen. Rising interest rates, repayment of government aid and the failure to adapt business models also played an important role.

Credit insurers, on the other hand, insure companies that their customers go bankrupt and do not pay their bills. In order to be able to assess the risk of insolvency as best as possible, they collect a lot of data about early warning signs such as delayed payments. They can therefore assess the future economic situation relatively well.

According to an extrapolation, they assume that insolvencies will increase by 20 to 25 percent to up to 18,200 in 2023. According to the forecast, next year there could be up to 20,000. The construction industry, the service sector and trade are most affected. To date, many bankruptcies have been prevented by government aid such as loans, said Langen. “The economic dynamic is weaker than the numbers indicate.”

The Federal Statistical Office has also reported an increase in bankruptcies. From January to September, the district courts reported 13,270 filed corporate insolvencies, 24.7 percent more than in the comparable period of 2022. According to the district courts, the creditors' claims were around 21.1 billion euros. That is almost twice as much as in the first three quarters of the previous year. The high increase also results from major bankruptcies, such as Gerry Weber and Peek & Cloppenburg. However, the figures also include catch-up effects. During the pandemic, bankruptcy rules were relaxed, meaning fewer companies went bankrupt during this time.