Germany: Bankruptcy Rates Continue to Rise
Germany bankruptcy rate enhance. According to Germany’s Federal Statistics Office, the number of bankruptcy filings by individuals and companies has risen by double digits since June. The number of bankruptcies has increased by more than a third since August.
Destats Data Declear Bankruptcy
The German Federal Statistics Office (Destats) published preliminary details of its annual report on Tuesday, showing a steady increase in the number of businesses and individuals declaring bankruptcy in Germany. According to Destats data, Germany bankruptcy filings increased by 22.4 percent in October 2023 compared to October 2022. In September, this number had increased by 19.5 percent. Statisticians say that double-digit growth has been seen continuously since June.
Fluctuate Economy Mostly Result insolvency
However, it is difficult to determine the actual timing of such fluctuations as applications take several months to process. Destats added that these figures only refer to companies that go out of business within the framework of the orderly bankruptcy process, and not to companies that fail to pay their bills or for other reasons. Due to forced bankruptcy.
German Registered Association
Despite the growing trend, fueled in part by an overall weak economy, experts say they don’t fear a tsunami of bankruptcies across the country. They attribute the trend to a natural shortage of such businesses. There are those who do not prepare themselves for the future. “Despite more than 30,000 bankruptcies a year, we will not see jumps like in the early 2000s,” Christoph Niering, chairman of the German Registered Association of Solvency Administrators (VID), said in Berlin last week.
Skilled Labor Shortages and Demographic Trends
According to Nairing, it is reasonable for companies to seek help for themselves, but he said, “Skilled labor shortages and demographic trends show how important it is to deliberately remove businesses that are not expected to survive.” Not a viable business concept.” He added that during the coronavirus pandemic and the energy crisis, state aid and relaxed laws on forced bankruptcy made companies appear artificially better off, so now it is normal to see an increase in bankruptcies.
Business insolvencies rose by more than a third in August, the Bureau of Statistics said. 1,556 businesses or individuals declared bankruptcy, which is 35.7 percent more than a year ago, in August 2022. Total commercial debt owed to creditors in August 2023 is estimated to be around €1.8 billion, up €1 billion from 2022.
The data shows that among the companies that filed for Germany bankruptcy, the most affected companies (9.9 percent) belonged to the transportation and storage sectors. It is follow by the service industry (seven percent). This trend will continue to affect these businesses as well as energy-intensive businesses such as the health sector, warned VID’s Christoph Nyering. He said that construction and real estate sectors are also likely to go bankrupt in the future.
Energy And Construction Sector
“Higher interest rates and significantly lower demand will put pressure. On developers and may soon hit smaller construction companies as well,” he said. According to the report, the least affected (0.6 percent) were entrepreneurs or individuals related to the energy production sector. According to statisticians, 5,843 applications for bankruptcy were receive in August, which is an increase of 8.6 percent.
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