Approximately 200,000 businesses experiencing economic decline
In 2025, Germany has witnessed a significant surge in business closures, reaching a peak not seen since the economic crisis of 2011. According to a study by Creditreform and the ZEW Mannheim [1], a total of 196,100 companies ceased operations in 2024.
The rise in insolvencies is a clear warning signal to economic policy, according to Patrik-Ludwig Hantzsch, head of Creditreform Economic Research [2]. Over a thousand closures were registered in energy-intensive sectors, with an increase of 26% compared to the previous year. Industrial businesses, particularly those in production, are suffering from high energy costs, contributing to the trend [2].
The housing industry also saw a 20% increase in closures, with around 9,700 companies leaving the market in 2024. The increase in business closures in Mannheim, specifically, is likely due to high energy costs [3].
Several sectors have been hit hard by these closures. In the heavy industry and manufacturing sector, ThyssenKrupp’s job cuts and investment in its steel division signal strains in steel and mining [2]. The technology and automation sector, including robotics and automation, has struggled with slowed market growth and revenue drops [5]. The automotive sector, with Tesla announcing mass layoffs totaling over 6,000 employees due to falling sales and intensified competition [2], has also been affected.
Economic pressure and restructuring, tough economic conditions, global market competition, and industry shifts are some of the causes behind these closures [4]. The German economy faced mild recession conditions leading up to 2025, with cautious signs of recovery delayed by fiscal and planning uncertainties, impacting businesses broadly [3].
Despite the rise in insolvencies, the number of affected jobs declined during the same period [1]. Government measures such as a EUR 500 billion investment fund, accelerated depreciation incentives, and planned tax cuts aim to stimulate economic recovery but have yet to reverse the trend fully by mid-2025 [3]. The planned incremental reductions in corporate tax rates from 2028 are designed to improve the business climate long term, but short-term recovery remains subdued [3].
Growing competition from abroad, particularly in robotics and automation, suggests the German manufacturing sector faces significant transformation pressures [5]. The study by Creditreform and the ZEW Mannheim shows that nationwide business closures in 2024 reached the highest level since the financial crisis in 2011 [1]. This is the highest number of business closures since 2011, according to researchers.
References: [1] Creditreform and ZEW Mannheim, Business Closures in Germany 2024 (2025). [2] Hantzsch, P.-L., (2025). Business Closures in Germany: A Warning Signal to Economic Policy. Creditreform Economic Research. [3] German Federal Government, Economic Stimulus Package (2025). [4] IWH - Leibniz Institute for Economic Research Halle, Insolvencies in Germany 2025 (2025). [5] VDMA - Verband der Maschinenbauindustrie e.V., Machine Tool Production Forecast 2025 (2025).
The surge in business closures, including those in the housing industry, is a result of economic pressure and tough conditions. The high number of company closures, equivalent to the financial crisis of 2011, according to the study by Creditreform and ZEW Mannheim, is a clear indication that various sectors, such as heavy industry, technology, and automotive, are struggling.
