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Economy on track? Fewer bankruptcies and increasing jobs!
Bankruptcies in Germany are falling slightly, but the number of jobs affected remains worrying. Current analyses.
Economy on track? Fewer bankruptcies and increasing jobs!
The Leibniz Institute for Economic Research Halle (IWH) reports a decline in corporate insolvencies in Germany. In April 2023, the number of bankruptcies reached 1,626, the highest level in 20 years. Another update shows that 1,478 insolvencies of partnerships and corporations were recorded in May. This represents a decrease of 9 percent compared to the previous month, but an increase of 17 percent compared to May 2024, according to the South German newspaper reported.
The construction, trade and manufacturing sectors, where the number of insolvencies remain high, are particularly affected. Steffen Müller, head of IWH insolvency research, expressed the expectation that the numbers could fall slightly in the coming months. Nevertheless, it is predicted that Germany will continue to experience more corporate bankruptcies in the future than in the previous year.
Affected jobs
The bankruptcies have a significant impact on the labor market. In May, around 15,000 jobs were affected in the largest 10 percent of insolvent companies. This number is 7 percent above the previous month, 27 percent above the May 2024 level and a remarkable 130 percent above average compared to the pre-coronavirus months between 2016 and 2019.
Despite these worrying numbers, there are positive early indicators for the economy, such as Mirror reported. These could indicate that the economic situation may be more stable than the bankruptcy data suggests.