MNI BRIEF: MoM German Insolvency Dip Seen As Temporary - IWH
Fewer firms went bust in November than previous month, but easing of court bottlenecks means figures will rise, Leibniz Institute reports
Fewer German partnerships and corporations went bust in November than in October, the latest think tank figures show, although the number is up significantly compared with the same time last year, with the slight decline in insolvencies not thought to suggest a change in the outlook.
Some 977 firms were declared insolvent last month, down 6% on October’s figure but up 21% year-on-year and 10% above the pre-pandemic level, with the Leibniz Institute for Economic Research Halle (IWH) expecting numbers to rise again in the coming months. Around 10,000 jobs were lost at the biggest 10% of firms, mostly in the healthcare and social service sector, with business-related services and industry some way behind.
Germany's economy is currently struggling due to a combination of high inflation, interest rates and energy cost, and fiscal uncertainty, with ECB hawk Isabel Schnabel admitting in an interview this week that the case for further rate rises has weakened significantly (see MNI INTERVIEW: ECB Too Confident On Rates-Holtemoeller). Steffen Müller, head of the IWH's Structural Change and Productivity department said, adding that while the drop was a surprise, it was likely to reflect bottlenecks in the German insolvency court system.