Germany is facing a renewed surge in corporate insolvencies, signaling persistent fragility within the national economy and raising concerns over job security. New data released Thursday by the Leibniz Institute for Economic Research Halle (IWH) reveals that insolvencies for both personal and capital companies reached levels nearly mirroring the record highs seen in the previous quarter, securing the second-highest insolvency figures recorded in two decades.
September’s insolvency count reached 1,481, representing a 5% increase from the previous month, a 14% increase year-on-year and a staggering 64% higher than the average for September in the years leading up to the COVID-19 pandemic. This resurgence points to an ongoing struggle for many German businesses grappling with a complex interplay of economic headwinds.
The scale of the problem is particularly evident in the number of jobs affected. The IWH estimates that approximately 20,000 jobs were at risk within the largest 10% of insolvent companies in September – a figure dramatically impacting communities and livelihoods. The level of job losses is substantially higher than in the previous month, standing at roughly four times the average for the pre-pandemic years of 2016-2019. The insolvency of the retail group Schlau, encompassing the Hammer specialist markets, contributed significantly to this impact.
Across the third quarter of 2025, a total of 4,478 personal and capital companies faced insolvency, narrowly missing the record set in the preceding quarter. Notably, this represents a higher number than observed in the aftermath of the major economic and financial crisis of 2009. While the total number of at-risk jobs within the largest insolvent companies dipped slightly to roughly 42,000 compared to the previous quarter, the overall trend indicates a shift towards smaller, but still impactful, insolvencies.
The crisis is not evenly distributed across sectors. While the industrial sector witnessed a significant decline in insolvencies (-27% compared to the previous quarter) and construction, trade and professional and scientific-technical services maintained relatively stable levels, most other major industries are experiencing new record highs. Regions particularly hard-hit include North Rhine-Westphalia, Bavaria, Baden-Württemberg and Berlin.
Steffen Müller, head of insolvency research at the IWH, attributes the ongoing wave of insolvencies to underlying macroeconomic challenges alongside delayed effects of prolonged low-interest rates and COVID-related state aid. “The upward trend in insolvencies has paused for now” Müller commented. “While high figures are anticipated for October, I expect a general consolidation of the insolvency situation at a high level in the coming months. However, this isn’t a result of improved economic conditions, but rather a diminishing impact of delayed consequences”. Müller characterized the increasing insolvency figures as “painful, but necessary market corrections” and structural adjustments paving the way for more sustainable businesses – a prospect that offers little immediate comfort to those facing job losses and economic uncertainty. These developments are likely to fuel political debate regarding long-term economic strategy and the efficacy of government support measures.