Wave of insolvencies in Thuringia: Companies and consumers severely affected!

Wave of insolvencies in Thuringia: Companies and consumers severely affected!

In the first quarter of 2024, the number of corporate and consumer bankruptcies in Thuringia rose sharply. This is shown by a current analysis, which says that corporate bankruptcies have increased by 24 percent compared to the previous year. A total of 96 corporate bankruptcies were recorded, an increase of 18 bankruptcies compared to the first quarter of 2023. These developments are part of a broader wave of insolvencies that is also affecting other federal states.

The automotive sector and industry are particularly affected. There were 22 insolvency proceedings among motor vehicle dealers and repair shops alone and 11 in the industrial sector. Experts blame this increase on increased costs and sales problems in export markets. The head of Creditreform economic research, Patrik-Ludwig Hantzsch, explains that the crises of recent years are now becoming visible in the form of bankruptcies, which is further weakening Germany as a business location.

Consumer bankruptcies and their effects

Consumer bankruptcies are also showing an alarming increase: They increased by 33 percent compared to the same period last year, resulting in a total of 419 consumer bankruptcies. Unpaid claims have also increased in this area, now totaling 127.5 million euros. On average, consumers now owe 51,000 euros, with creditor claims more than twice as high as last year at 61.6 million euros.

A total of 640 insolvency proceedings were filed with the local courts in Thuringia in the first quarter, which illustrates the challenges of the worsening economic situation. According to the recent report by South Germans Bankruptcies could continue to rise in the coming years as the country's economic policy standstill and declining innovative power become increasingly noticeable.

Cross-industry effects and forecasts

The wave of bankruptcies not only affects individual companies, but also has an impact on blue-collar jobs: around 600 employees have lost their jobs due to the bankruptcies. Despite these worrying figures, it should be noted that bankruptcy filings do not necessarily mean the end of businesses and jobs. Rather, it is often a matter of restructuring processes.

In a nationwide comparison, Thuringia currently has the lowest insolvency rate. For 2023, 44 insolvencies per 10,000 companies are expected in Thuringia, compared to 39 in the previous year. Still, the region faces challenges as Germany as a whole is forecast to see an increase of almost a quarter in corporate bankruptcies compared to last year, pointing to fears of an impending economic crisis.

The decorative chain Depot should be mentioned as an example in this context, whose bankruptcy surprised many people. The insolvency comes in a year in which Creditreform expects 22,400 corporate bankruptcies in Germany by the end of 2023, the highest level since 2015. This clearly shows how serious the situation is and that a further increase in bankruptcies is to be expected, potentially reaching the highs of 2009 and 2010.

In summary, both companies and consumers in Thuringia are facing major economic challenges, with rising bankruptcies potentially presenting both risks and opportunities to adapt to the current market situation.