Germany: bankruptcies at highest level since 2020. Mainly trade and construction suffer
According to a study by the credit insurance company Allianz Trade, reported by Manager Magazin , there are more and more major bankruptcies in the German economy. “Large bankruptcies have returned this year and are moving towards the highest level since 2020,” says Maxime Lemerle, insolvency expert at Allianz Trade. This year there have been a particularly large number of large bankruptcies in retail (especially fashion), hospitals and mechanical engineering. Allianz Trade defines large insolvencies as the failures of companies with an annual turnover of at least 50 million euros.
According to the study, the number of large bankruptcies in Germany is approaching the record level of 2020, with 45 cases in the first nine months of 2023. For comparison: in the same period in 2022 there were a good third fewer, with 26 major defaults and in 2021 there were only 17. “2020 marked the highest level of defaults since 2016 with 58 major defaults in the entire year and 44 cases in the same period in the first new months.”
Most bankruptcies occur in the construction industry
By September 2023 a total of twelve large textile companies and fashion retailers will enter insolvency. Germany's largest fashion retailer Peek & Cloppenburg also had to file for bankruptcy in March. The controversial moves in the run-up to the bankruptcy caused an uproar. manager magazin talked about the failed tricks of Peek & Cloppenburg.
According to the study, six hospitals are also affected. “This corresponds to the situation report of the German Hospital Institute (DKI), as two thirds of German hospitals currently describe their financial situation as negative or very bad, and this figure is even higher for medium-sized hospitals,” write the insolvency experts on Allianz Trade. Major failures also occurred in the mechanical engineering sector with five cases, as well as in the metals (four) and construction (three) sectors.
According to the study, the highest number of insolvencies across all company sizes so far have been recorded in the construction sector, followed by retail and service sector companies. “The retail sector saw the strongest increase in the number of cases compared to the same period last year, but the hospitality sector was also showing weakness even before the VAT increase.”
The head of Allianz Trade for the German-speaking area, Milo Bogaerts, also predicts a difficult time for retail trade in the upcoming Christmas activities. “This year there will probably be a lot fewer presents under the Christmas tree,” says Bogaerts. “Food prices remain high despite the lower inflation rate. Consumers therefore save on all other expenses: they go out less, buy fewer clothes and Christmas gifts."
This increase in bankruptcies in the face of an economically complex situation, also with problems from the point of view of the federal budget, will certainly not help the maintenance of positive economic growth in Germany.
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The article Germany: bankruptcies at the highest level since 2020. Trade and construction mainly pay comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/germania-bancarotte-a-livello-piu-alto-dal-2020-pagano-soprattutto-commercio-ed-edilizia/ on Wed, 29 Nov 2023 13:20:11 +0000.