DAccording to calculations by the Halle Institute for Economic Research (IWH), the number of company bankruptcies increased significantly in September. The number of insolvencies of partnerships and corporations rose by 34 percent compared to the same month last year to 762, according to the IWH insolvency trend published on Monday. “The number of insolvencies will continue to increase noticeably in the coming months,” predicted IWH expert Steffen Müller.
According to the information, this is primarily due to the sharply rising prices of important production factors in addition to the deteriorating economic situation. In addition to energy costs, wages and interest on loans are also rising. “After a long period of very low insolvency figures, they are expected to return to the level before the corona pandemic in November 2022,” said Müller. For the year as a whole, growth of between 12 and 14 percent is expected despite the rapidly increasing numbers, since the insolvency figures in the first half of the year were still slightly below the previous year’s level.
“A wave of bankruptcies is approaching us in the skilled trades”
According to the IWH, gross domestic product will fall by 1.4 percent in the coming year, after growing by 1.1 percent this year. “The German economy is facing a recession,” summarized the IWH in its recently published autumn forecast. “The reason is the enormous increase in the price of fossil fuels.”
Due to skyrocketing energy costs, warnings from politics and business of a wave of bankruptcies have recently increased. According to the BDI industry association, this is a major challenge for 58 percent of companies, and for 34 percent it is a matter of survival. According to the ZDH industry association, the economic situation is also coming to a head in the skilled trades. “In the trades, a wave of insolvencies is rolling towards us because of the energy crisis,” said ZDH President Hans Peter Wollseifer.