Economy in crisis: Almost 200,000 companies will close in 2024!

Economy in crisis: Almost 200,000 companies will close in 2024!

The economic situation in Germany will have deteriorated dramatically in 2024. Loud Government Gazette The Federal Republic recorded a 16% increase in company closures compared to the previous year. A total of 196,100 companies had to stop their activities, which is the highest figure since 2011, when many businesses went out of business as a result of the financial crisis.

All sectors of the economy are particularly affected; the increased competitive pressure from which industrial companies in particular suffer is also mentioned. High energy costs are a key problem that has become increasingly pressing in recent years. Over 1,000 business closures in energy-intensive sectors were recorded, an increase of 26%. This particularly affects the chemical and pharmaceutical industries, where 360 ​​companies have closed, the highest level in over two decades.

Industry-specific challenges

The negative trend runs through all sectors. Technology-intensive services, for example, reported a 24% increase in closures, with approximately 13,800 businesses affected. The housing industry has not been spared either, with an increase of 20%, which means around 9,700 company closures. Particularly noteworthy is the shortage of skilled workers, which leads to bottlenecks in promising sectors and results in fewer orders.

The figures also show that larger, economically active companies are also increasingly closing. Last year, 4,050 such companies were deregistered, with this trend continuing for the third year in a row. Many companies are relocating their production abroad or no longer investing in Germany, which could lead to an alarming loss of substance and know-how.

Impact on small businesses

The situation for small businesses is just as tense. Loud ZDF André Bartel, who has run a family business in Esslingen that has existed for over 50 years, is experiencing considerable difficulties. Despite an order volume that corresponds to an annual turnover, he is unable to process his orders due to a lack of materials. A lack of resources in areas such as heating construction, electrical installation and window construction is slowing down its production.

Bartel also criticizes the over-regulation on construction sites, which leads to numerous controls and disrupts work processes. Karl Breer, who runs a building cleaning company and has noticed a decline in demand from the construction industry, has a similar situation. Although he has good orders in other areas, he suffers from a lack of staff. He estimates that he could make 20-30% more sales if more staff were available.

Costs and layoffs in the automotive industry

The situation in the automotive industry also remains tense. Company managers such as Michael Weiss from ACPS Automotive report operational layoffs, for example at large companies such as VW, Bosch and ZF. The financial situation is additionally burdened by the volatile business situation and the high energy costs, which are viewed as a significant location disadvantage in Germany. These costs have a negative impact on the entire supply chain, especially in metal processing.

The alarming business closure figures and the difficulties faced by both large and small companies highlight the pressing challenges facing the German economy. Uncertain political decisions and an increasing administrative burden increase the problems that many entrepreneurs have to deal with in everyday life.