The German industrial landscape is bracing for a significant surge in corporate insolvencies, according to new data from restructuring consultancy Falkensteg, raising concerns about the long-term health of the nation’s economy. Analysis presented to the “Handelsblatt” indicates a sharp escalation, with 471 large companies – those generating over €10 million in revenue – filing for insolvency in 2024. This represents a 25% increase compared to the previous year, following a substantial 35% rise in large insolvencies in 2023.
Falkensteg partner Jonas Eckhardt projects a further 15-20% increase in large corporate failures for 2026, suggesting the situation is escalating beyond a period of necessary correction. “In some sectors, it’s now simply about survival” Eckhardt stated, highlighting a deepening crisis within specific industries.
The automotive supply chain is emerging as a particularly vulnerable area, with manufacturers of metal components – critical for vehicle production – registering 65 insolvency applications last year. Alarmingly, car dealerships experienced the most dramatic spike, with insolvency filings nearly tripling. This points to a potential broader downturn within the vital automotive sector, impacting jobs and economic output across the country.
The precarious state of affairs is compounded by high levels of corporate debt, severely restricting access to much-needed credit. As Georgiy Michailov, managing director of restructuring consultancy Struktur Management Partner, told “Handelsblatt”, “We are at a tipping point”. With projections for minimal economic growth, Michailov warns of an inevitable rise in “economically significant insolvencies” indicating a potentially challenging period for German businesses and policymakers alike. The situation demands a critical assessment of existing industrial policy, the burden of corporate debt and the ability of businesses to navigate a sluggish economic outlook, lest the escalating insolvency rates trigger a more profound economic recession.