More German companies filing for bankruptcy in 2024

Amid Germany's economic downturn, the number of companies in the country filing for bankruptcy rose by 16.8% in 2024 compared to the year before, according to a report from the Federal Statistical Office released on Friday.

In the final month of the year, insolvency filings rose by 13.8% compared to the same month in 2023, the agency said.

The figures only include bankruptcy cases in which a court has made a first decision, the agency emphasized. For most companies, the initial bankruptcy filing was usually about three months prior to the decision date.

In October, the most recent month for which final data is available, the figures shot up. Local courts reported 2,012 corporate bankruptcy filings - 35.9% more than a year earlier.

Creditors' claims amounted to around €3.8 billion ($3.9 billion), more than twice as much as in the previous year, when claims for the month totalled €1.6 billion.

Volker Treier, chief analyst for the German Chamber of Commerce and Industry (DIHK) business lobby group, called the increase "a clear warning signal" about the state of the country's economy.

"Corporate insolvencies have reached their highest October level for 10 years," Treier said.

According to the Federal Statistical Office, there were 5.9 corporate insolvencies per 10,000 companies in October. Most of the bankruptcies came in the transport, storage, construction and hospitality sectors.

Consumer bankruptcies rose by 10.8% to 6,237 cases in October compared to the same month in 2023.

The credit reference agency Creditreform has projected 22,400 corporate bankruptcies in Germany over the course of 2024. That would be the highest level since 2015.

Creditreform also warned that bankruptcy filings in 2025 could match the peak hit during the financial crisis in 2009, when more than 32,000 companies sought bankruptcy protections in court.

The list of challenges facing companies in Germany is long: high energy costs, complaints about government bureaucracy, political uncertainty and consumer reluctance to spend.

In addition, emergency rules instituted during the coronavirus pandemic by the German government to prevent a wave of bankruptcies have since expired.