The number of insolvencies for both sole proprietorships and corporations in Germany saw a surprisingly sharp increase in March. According to an analysis published on Thursday by the Leibniz Institute for Economic Research Halle (IWH), the count recorded this quarter reached levels not seen in this sector for over twenty years.
Specifically, the incidence of insolvencies for these entities stood at 1,716 in March. This represents a 17 percent rise compared to February, an 18 percent increase over March of the previous year, and a significant jump of 71 percent compared to the average March between 2016 and 2019, the period preceding the COVID-19 pandemic. The volume of monthly insolvencies for both types of businesses was last as high in June 2005. During March 2026, the highest recorded levels were observed in the construction sector, trade, and other economic services. Furthermore, the region of Bavaria, along with Baden-Württemberg and North Rhine-Westphalia, reported regional peak numbers in March.
The IWH’s insolvency trend data indicated that the top ten percent of insolvent companies affected approximately 14,000 jobs in March. While this figure represents a 40 percent drop from the previous month’s employment impact and a 15 percent decline from March 2025, it remains 77 percent higher than the average for a typical March during the pre-pandemic years of 2016 to 2019. This substantial uptick in the number of insolvencies is primarily attributed to a concentration of failures among smaller businesses.
In the first quarter of 2026, Germany documented a total of 4,573 insolvencies for sole proprietorships and corporations. This figure marks the highest quarterly count since the third quarter of 2005, placing the current insolvency rate above the levels observed during the major financial crisis of 2009. Overall, insolvencies impacted about 54,000 jobs-the highest figure recorded since the third quarter of 2020 (a period which included major companies such as Esprit, Vapiano, and Wirecard). As was the case in prior quarters, the manufacturing industry accounted for the largest proportion of affected jobs in Q1 2026, with around 16,000 positions impacted.
The IWH issues early indicators that tend to predict insolvency developments two to three months in advance. These early indicators have been rising steadily in recent months, reaching unusually high levels in February and March. According to Steffen Müller, Director of IWH Insolvency Research, the indicators suggest little room for optimism regarding the second quarter of 2026. He stated that they anticipate continued very high insolvency numbers, adding that a repetition of the elevated levels seen in March remains possible.