Increase in corporate bankruptcies in Germany indicates economic shift
Date
11/8/2023 2:33:58 AM
(MENAFN) Recent data from the Leibniz Institute for Economic Research in Halle, Germany, has revealed a concerning trend in corporate insolvencies. In October, the number of companies declaring bankruptcy surged, reaching 1,037 firms. This represents a significant 44 percent increase compared to the same month in 2022 and a notable 12 percent uptick when compared to the average for this time of year between 2016 and 2019.
Steffen Mueller, who heads the department responsible for insolvency research at the institute, described this increase as a pivotal shift in the economic landscape. He emphasized that after accounting for the number of working days, October witnessed the highest number of company bankruptcies since the pandemic's onset. However, Mueller was quick to point out that this surge doesn't necessarily signify the beginning of a bankruptcy wave. He highlighted that previous periods, such as in 2003 and 2010, saw monthly bankruptcy numbers sometimes exceeding 2,000 cases, more than double the current rate. The size and scale of the companies involved play a pivotal role in determining the overall impact.
The majority of bankruptcies in October were concentrated in the health and industrial sectors. The health sector, in particular, saw a significant number of clinics and hospitals facing financial distress, which had a ripple effect on many workers. The institute anticipates that this trend of rising bankruptcies may persist and potentially intensify in the coming months, underscoring the ongoing challenges in the German business landscape.
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