MNI BRIEF: German Insolvencies Peak Before Summer Slowdown
Record number of firms went bust in April, but indicators suggest improvement by June at the latest, IWH says.
A ecord number of German firms went bust in April with around 34,000 jobs lost among the largest 10% of affected firms, according to the latest IWH insolvency trend data, although the recent wave of insolvencies is expected to break soon.
Some 1,367 companies were declared bankrupt last month, 5% more than in March - when the previous record was set - and 47% higher than in April 2023. Construction, trade and services were the worst affected sectors, with renewed insolvency of the Galeria Karstadt chain and a rise in the number of failing SME also blamed for an increase in job losses.
"The leading indicators have been falling continuously for three months. I expect the insolvency figures to start falling again as early as May, but by June at the latest," IWH’s Steffen Müller said. Germany's economy has shown signs of limited improvement in recent weeks (See MNI INTERVIEW: No Great German Growth Leap - Gov't Advisor).