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Record value: 1297 companies went bankrupt in March - IWH study
Negative record in corporate insolvencies: Current article about the rising wave of insolvencies in Germany. Find out more about the reasons and effects. #insolvency wave #bankruptcies #economic research
Record value: 1297 companies went bankrupt in March - IWH study
In March, the wave of insolvencies in Germany reached a negative record, as shown by the monthly insolvency trend from the Leibniz Institute for Economic Research (IWH). With 1,297 insolvent companies, this was the highest level since the survey began in 2016. This increase of 9 percent compared to the previous month even exceeds the already worrying value from February. In addition, the current number is 30 percent above the average value of March bankruptcies in the years before the corona pandemic.
The bankruptcies led to 11,000 affected jobs in March, as the IWH determined by evaluating court insolvency announcements and corresponding balance sheet data. Particularly for larger employers, the closures could lead to long-term loss of income for employees. Even when companies are restructured and continued after bankruptcy, there is often a significant reduction in personnel.
The weakening economy and changes in the economic world have led to an increase in high-profile corporate bankruptcies. For example, the department store group Galeria Karstadt Kaufhof had to file for bankruptcy for the third time in four years. The insolvency of the Signa real estate group, which has a stake in German department store chains, is also attracting attention.
The real estate industry, which is struggling with rising interest rates and construction costs, has recently proven to be particularly vulnerable to insolvencies. Even in the health sector, which is considered to be economically resilient, hospital and nursing home bankruptcies are increasing.
Insolvency researcher Steffen Müller from IWH also expects high insolvency figures for April. Nevertheless, early indicators suggest that the increase may be leveling off and numbers could decline slightly from May. This development could bring hope to workers who have lost their jobs due to bankruptcies, as skills shortages have made it easier to find new employment.