Chekin' Out: Slump in Corporate Collapses, Yet Job Losses Persist
Business Failure Rates Dropping According to Economists - Predicting Reduction in Company Collapses According to Economists
Okay, let's get this straight. The Leibniz Institute for Economic Research Halle (IWH) has dropped some knowledge on us, and it's all about the changes in corporate insolvencies in Germany.
So, here's the deal: after hitting a 20-year high in April, the number of corporate insolvencies - that's solo prop shops and corporations - in Germany fell by 9% in May, landing at a total of 1,478. That's according to the IWH's latest stats.
But guess what? That's still an 17% increase compared to May 2024. And yeah, the construction, retail, and manufacturing sectors sucked the big one, with insolvencies duking it out there.
Now, Steffen Müller, the big cheese in charge of IWH's insolvency research, shared some insight. He reckons insolvencies might, just might, dip a teensy bit more in June. But here's the kicker: more company bankruptcies are expected in the future than in the previous year. Yikes!
The IWH's latest figures also show a rise in job losses. Around 15,000 jobs got swallowed up in the largest 10% of insolvent companies in May. That's a 7% jump from the previous month, a whopping 27% increase compared to May 2024, and an insane 130% higher than average job losses during the pre-COVID years of 2016 to 2019. Holy crap!
Alright, for those who want to know more: the IWH hasn't dished out a detailed long-term forecast in its recent June update. However, other heavy hitters in the economic analysis game, such as Allianz Trade and the Leibniz Institute, aren't holding back. They're predicting a harrowing picture for the rest of 2025 and 2026, with Allianz Trade forecasting an 11% increase in corporate insolvencies for 2025, and another 3% surge in 2026 – putting at least 210,000 jobs on the line. And the Leibniz Institute hasn't been holding back either, reporting record high insolvencies compared to previous years.
So there you have it, folks. Fewer companies filing for insolvency in the short term, but the impact on jobs is growing and expected to remain high, with gloomy predictions for the rest of the year and into 2026. Time to buckle up, Astronauts. It's gonna be a bumpy ride.
- Job Losses
- Germany
- Company Bankruptcy
- Economic Forecast
- Leibniz Institute, Allianz Trade
- Insolvency
- Institute for Economic Research Halle
In light of the slumping corporate collapses in Germany, an alarming growth of job losses persists. The Leibniz Institute for Economic Research Halle has revealed that around 15,000 jobs were lost in the largest 10% of insolvent companies in May, marking a significant increase of 27% compared to the same month in 2024. Moreover, economic forecasts from other experts like Allianz Trade and the Leibniz Institute predict a continued rise in company bankruptcies, posing a threat to at least 210,000 jobs in the near future.
