Steep escalation in bankruptcies: ongoing surge in corporate dissolutions

In August 2024, Germany saw a significant increase in business insolvencies, with a total of 1,764 cases, marking a 13.4 percent rise compared to the same month the previous year. The claims of creditors in these insolvencies amounted to around 2.4 billion euros.

The transportation and warehousing sector led the way with 9.2 insolvencies per 10,000 companies, followed closely by the hospitality industry with 7.8 cases per 10,000 companies. The construction industry also saw an above-average rate of 7.2 insolvencies per 10,000 companies.

These increases are primarily attributed to ongoing economic challenges such as high energy prices, bureaucratic burdens, and political uncertainty, alongside the expiration of pandemic state support. The trend of double-digit growth rates in business insolvencies, observed since June 2023, continued, with the exception of June 2024.

In contrast, consumer insolvencies slightly decreased in August 2024 compared to the previous year, with a total of 5,672 cases, representing a 2.9 percent decrease. This decrease was reported by Destatis, the German Federal Statistical Office.

The construction industry, temporary employment agencies, and other economic services also saw a decrease in consumer insolvencies, with rates of 7.2, 7.3, and 7.8 insolvencies per 10,000 companies, respectively.

Looking back to August 2023, the number of consumer insolvencies was not provided in the article. However, it's worth noting that the trend of decreasing consumer insolvencies, as stated in the previous trend, was not observed in August 2024.

In a surprising turn of events, October 2024 saw a further increase in business insolvencies, with a 22.9 percent rise compared to the same month the previous year, according to Destatis.

In conclusion, while consumer insolvencies slightly decreased in August 2024, business insolvencies continued to rise, particularly in the transport and storage, hospitality, and construction sectors. The economic challenges faced by businesses in Germany continue to be a significant concern.