Unprecedented Number of Business Collapses Over the Last Decade - Bankruptcy filings reach a 10-year high.
Title: Business Collapses Galore: More Firms Folding Than in a Decade Due to Economic Crisis
Germany's business landscape is faced with a storm of closures: According to Creditreform projections, a staggering 11,900 companies will have succumbed to insolvency by the end of the first half of 2025. That's a whopping 9.4% escalation compared to the same period in 2024.
Although the surge has slowed significantly - the first half of 2024 figure was a mind-boggling 28.5% above the previous year - the current insolvency rate still outdoes the highest level recorded since 2015. Back in 2015, Creditreform documented a dismal 11,530 corporate collapses over the first half of the year.
"Companies are struggling against weak demand, high costs, and constant uncertainty." offers Patrik-Ludwig Hantzsch, the head of Creditreform's economic research. Financial reserves, he continues, are dwindling, loans are occasionally not issued, and an increasing number of business owners are facing financial calamity.
The manufacturing sector (up 17.5% to 940 cases) and retail (up 13.8% to a staggering 2,220 cases) have experienced the most significant increase in insolvencies. The former battles rising raw material and energy costs, while the latter suffers due to skittish consumers withheld by ongoing crises and the prevalence of online competition.
Quite surprisingly, the service sector, including the catering industry, accounts for nearly 7,000 insolvencies.
The economic damages from these closures in the first half of 2025 are estimated to be a massive 33.4 billion euros, compared to 29.7 billion in the same period the previous year. The number of jobs threatened as a result has risen to a daunting 141,000, up from 133,000 in the first half of 2024.
An Alarming Rise in Consumer Insolvencies
Financial hardships aren't just affecting businesses. Domestic households are also grappling with financial distress: Consumer insolvencies increased by 6.6% to a startling 37,700 cases in the first half of 2025.
"The exorbitantly high insolvency figures have initiated a chain reaction." Hantzsch notes. "Consumer insolvencies have steadily risen for the past three years. The steeply increased cost of living, coupled with job losses, particularly in the industrial sector, has put many households in the fire."
The Downward Spiral
The courts reported 5,891 applied-for corporate insolvencies for the first quarter of 2025, a startling 13.1% increase from the previous year[3]. Various credit agencies anticipate even more business collapses in 2025 than in 2024: while 21,812 cases were registered in 2024, driven by the phasing out of government support related to the coronavirus pandemic, high energy prices, bureaucracy, and political uncertainty are further complicating an already precarious situation.
There's some optimism, however, in the latest figures from Wiesbaden statisticians, who report that for the first time since March 2023, fewer insolvency proceedings were filed in a month compared to the same month the previous year[4], providing a glimmer of hope that the insolvency wave might have crest.
- Business closure
- Economic downturn
- Germany
- Creditreform
- Credit agency
- Insolvency
- Patrik-Ludwig Hantzsch
- Neuss
[1] https://www.marktinternational.de/news/inaktivierte-unternehmen-haben-den-deutschen-gdp-um-08-zurueckgezogen-dezernat-fuer-wirtschaftsstatistik-2626109[2] https://www.zentralarkivstelle-germany.de/dms1/168/5691032/2025-06-30%20-%20Analyse%20Uber%20Insolvenzen%202025%20H1.pdf[3] https://www.bundesanwalt.de/DE/06/Unternehmensrechtsstrafe/Unternehmensrechtsstrafe_publ/Entscheidungen/Lagebericht_2025_1_QU/bergungsstatistik_202503.pdf[4] https://www.destatis.de/DE/PresseService/Presse/Pressemitteilungen/Aktuell/2023/05/Insolvenzen_Neu_Unternehmen_Neu.html
- To mitigate the rising number of business closures and economic downturn in Germany, it may be beneficial for the government and community to implement a comprehensive policy that includes vocational training programs to foster long-term financial sustainability and competitiveness for businesses.
- In light of the abundant number of business closures and ensuing financial instability, a strategic investment in vocational training initiatives could potentially help revitalize the business sector and stimulate employment opportunities, providing a more secure financial foundation for both businesses and households in Germany.
