Credit giant sounds alarm in Germany: wave of bankruptcies feared
Berlin - The world's largest credit insurer Allianz Trade has warned of a huge increase in corporate bankruptcies in Germany. By the end of the year, the number is expected to "rise by 21 percent," the company said . That would correspond to around 21,500 bankruptcies.
Last year, the increase was around 22 percent. The situation is not expected to calm down until 2025: a further increase of two percent is expected.
Large companies in particular are affected by the wave of bankruptcies. In the first half of 2024, there were "already 40 major insolvencies," i.e. bankruptcies among companies with an annual turnover of at least 50 million euros. "This is not only the highest half-year figure since 2015, but also more than a third more than in the same period last year," Allianz Trade said.
Construction and retail are particularly affected
"At the moment, the rule is often: when things go wrong, they go badly," said CEO Milo Bogaerts. "Major bankruptcies often have a domino effect on many companies throughout the supply chain. It is not uncommon for them to be swept along and get caught up in the downward spiral, which in the worst case also ends in insolvency."
The total damage from major insolvencies in the first six months amounted to around 11.6 billion euros. This means that it already exceeded the total damage for 2023 in the first half of the year. The average turnover of the insolvent large companies was 290 million euros.
Companies in the construction and retail sectors are particularly affected . In each of these sectors, nine large companies each became insolvent during the year. There were also many bankruptcies in the services, furniture and household goods sectors. Bogaerts said: "The reasons for this accumulation are sometimes very different. Some companies were unable to meet the repayments of Corona loans due or had difficulty obtaining new loans due to the more restrictive lending and the much higher requirements of the financing partners. Still others were dependent on a single major customer who disappeared."
Fashion companies are hanging by a thread
In the fashion retail sector, "some companies have been hanging by a thread for years ," emphasised Bogaerts. The "consumer-oriented sectors" are particularly feeling the "current reluctance to buy". Added to this are the "continued high container freight rates", i.e. the prices for transporting goods. In view of the upcoming Christmas business, this is causing concern for many entrepreneurs.
The seven major bankruptcies in the service sector also included three hospitals. Two other bankruptcies affected tourism companies and two companies in the computer software sector.
Source: Junge Freiheit
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