Insolvency numbers for German companies drop in November, but remain high
According to a recent analysis by the Leibniz Institute for Economic Research (IWH), the number of insolvencies among German companies in November decreased from the October high.
In November, the number of company insolvencies was 1,345, a 12% decrease from the previous month, but a 38% increase from November 2023. The current number is 52% higher than the average November value from 2016 to 2019, before the pandemic.
However, the insolvency numbers remain at a significantly higher level. The slight decline in November was not uniform across all industries and states. Large company closures often lead to significant and lasting income and salary losses for affected employees.
According to the IWH’s insolvency trend, around 11,000 jobs were affected in the top 10% of insolvent companies in November, a figure close to the previous month’s and similar to November 2023’s, but 59% higher than the average of a typical November from 2016 to 2019 before the pandemic.
Steffen Müller, head of insolvency research at the IWH, expects similar numbers of insolvencies in December and January, with the numbers remaining above the pre-pandemic level. Early indicators of insolvency surged in November, so significant increases in insolvency numbers are possible from February onwards.
“If the high level of insolvency early indicators in November is confirmed in December, a significant increase in insolvency numbers should be expected from February” Müller said.