In August, the number of bankruptcies concerning both individuals and companies in Germany declined. According to the insolvency trend report published on Tuesday by the Leibniz Institute for Economic Research Halle (IWH), the figure stood at 1,525. This represents a ten percent decrease from July, yet it remains nine percent higher than the same month of the previous year. Furthermore, the current number is 63 percent higher than the average August recorded between 2016 and 2019-the period preceding the COVID-19 pandemic-indicating that insolvency levels remain high despite the month-over-month reduction.
Regarding the impact on the workforce, over 16,000 jobs were affected in the top ten percent of insolvent companies during August. This figure significantly exceeds the number of affected employees in July (+21 percent), is 33 percent higher than the previous year, and is more than double (+103 percent) the average for August in the pre-pandemic years of 2016 to 2019.
The institute’s early indicators suggest that insolvency numbers are expected to remain very high in the coming months. Steffen Müller, head of IWH’s insolvency research, stated that the August decline should be viewed as a temporary pause rather than a sign of relief, given the absolute peaks seen in recent months. He added that while there are initial signs of economic recovery, the general pattern of insolvency activity continues on a high level.
