Steep Rise in Bankruptcy Filings Since October
Germany has witnessed a significant increase in corporate bankruptcies in the year 2025, with insolvency filings reaching record highs in many years. In July 2025 alone, 1,588 companies filed for bankruptcy, the highest in 20 years, except for a record peak in April[1].
The second quarter of 2025 saw over 4,500 corporate bankruptcies, representing a 7% rise from the previous quarter and surpassing even the levels seen during the 2009 financial crisis[2].
Several factors contribute to this rise in bankruptcies:
- Prolonged economic recession: Germany has been in a two-year recession, which has impacted business liquidity and overall economic health[2][3].
- High energy costs: Elevated energy prices continue to strain corporate finances, particularly in energy-intensive industries[2][3].
- Overregulation and high tax burdens: Businesses cite Germany’s regulatory environment and tax policies as obstacles to profitability and sustainability, driving some companies to insolvency or relocation abroad[2].
- Sector-specific declines: The construction sector has notably collapsed, with construction output falling 4% in 2024 and forecasted to decline further by around 2.5-3% in 2025. The transport, warehouse logistics, hospitality, and hotel sectors have also seen significant insolvency increases[2][3][4].
- Shrinking consumer demand and rising costs in hospitality: The gastronomy sector faces a sharp decline in sales and rising input prices, exacerbated by VAT increases and inflation, causing many restaurants and pubs to struggle or close[4].
- Underutilization of production capacity: Manufacturing has seen output declines of about 14% since 2017, contributing to financial stress despite some containment of bankruptcies among larger corporations[5].
- Rising loan defaults: The ratio of non-performing loans has increased markedly, signaling deteriorating credit conditions and higher financial risk for businesses, especially in manufacturing[5].
Jupp Zenzen, an economic expert at the German Chamber of Industry and Commerce (DIHK), comments that the economic crisis is causing a growing wave of corporate insolvencies[6]. Despite the increase in bankruptcies, relatively few jobs are affected due to fewer large insolvencies.
References:
[1] Federal Statistical Office (2025). Insolvencies in Germany. Retrieved from https://www.destatis.de/EN/Themes/EconomyAndTransport/BusinessAndTrade/Insolvencies/Insolvencies.html
[2] DIHK (2025). German economy in crisis: Growing wave of corporate insolvencies. Retrieved from https://www.dihk.de/en/news/press-releases/german-economy-in-crisis-growing-wave-of-corporate-insolvencies/
[3] Bundesbank (2025). Economic situation in Germany. Retrieved from https://www.bundesbank.de/en/topics/economic-data-and-research/economic-situation-in-germany-12483
[4] VID (2025). Insolvencies in the hospitality industry. Retrieved from https://www.vid-ev.de/de/themen/insolvenzen-im-gastronomiebereich/
[5] BGA (2025). Bankruptcies in manufacturing industry. Retrieved from https://www.bga.de/en/statistics/bankruptcies/bankruptcies-in-manufacturing-industry/
[6] Zenzen, J. (2025). Interview: The economic crisis and its impact on corporate insolvencies. Retrieved from https://www.dihk.de/en/news/interviews/the-economic-crisis-and-its-impact-on-corporate-insolvencies/
1) The unprecedented rise in corporate bankruptcies in Germany during the second quarter of 2025, surpassing even the levels seen during the 2009 financial crisis, can be attributed to several factors such as prolonged economic recession, high energy costs, overregulation and high tax burdens, sector-specific declines, shrinking consumer demand, rising costs in the hospitality sector, underutilization of production capacity, and rising loan defaults.
2) The finance sector in Germany may experience an increased workload due to the growing wave of corporate insolvencies, as more companies are filing for bankruptcy and seeking the expertise and guidance of financial professionals to navigate the insolvency process.
