Prepare your company and get ready for the future. Take part in the SCHUMANN Conference - the online live event for decision-makers in credit risk management, compliance and digitalisation projects.

Logo Created with Sketch. SCHUMANN - EN

Insolvencies at a Peak?

Insolvencies in Germany have risen again – find out in SCHUMANN Insights why the building industry, logistics and even hospitals are affected, and which economic factors are the background to this.
Blog Post, Schumann Insights, Videos
, Prof. Dr. Matthias Schumann

Increasing Insolvencies: Prognosis for 2024

In the first quarter of 2024 there were more than 5000 insolvencies in Germany. For the current year, more than 20,000 are expected. Is this a new peak and is it the result of the sluggish economy or is there something else behind it?

Historic Perspective

If we consider the last 15 years, the number of insolvencies expected for 2024 is still extremely moderate. In the aftermath of the financial crisis in 2010 there were 32,000 insolvencies. The figure then sank successively until it reached 18,700 in 2019. Also in the year 2000, when the dot-com bubble finally burst, the number of bankruptcies was significantly above 25,000. So this situation is not unusual. An outlier was the insolvency statistics during the corona crisis, which were between 14,000 and 16,000. State aid, in particular short-time working allowance and bridging allowance, contributed to the survival of companies that were actually no longer competitive. The after-effects are still continuing. It is possible that companies whose position was quite good at the time will now also be negatively affected and that price competition from the companies being propped up by the government has distorted the market.

Cost of the Damage and Economic Factors

A look at the cost of the insolvencies shows a mixed picture. The most expensive insolvencies year was 2009 with almost 79 billion euros. The year 2021 followed with 51 billion euros and last year the cost of the damage was 34 billion euros in Germany. It can be assumed that there will be a large increase in this cost in 2024. This makes clear that despite 30 percent less insolvencies than in 2010, the cost of the damage associated with them is higher. One reason for this is the significant increase in outstanding receivables in the German economy.

Industries in Focus

In energy-intensive industries the increased energy prices have certainly contributed to increasing insolvencies. The higher interest rates have also had an effect. This applies to all the areas of the economy in which insolvencies are increasing. The building industry is being affected more often than the average – also because of the low level of activity in building construction. Here, the level of equity capital is also traditionally low. But the situation is also affecting providers of logistics services.

Temporary Employment Agencies and Healthcare

Temporary employment agencies are suffering from a lack of business, with temporary employment contracts being the first to be cut back. Particularly noticeable is the increase in bankruptcies of hospitals and care homes, although particularly for the latter the demand is high. Especially in the area of hospitals there have been several large insolvencies in the past year. The automobile supply industry is suffering from the lack of sales of cars. This has been exacerbated by the cost of digitalization and the switch to electric motors.

Individual Cases and Market Dynamics

Of course there are also bankruptcies that have been on the cards for a long time due to weakness in liquidity. The tourism company FTI is such an example of high debt levels – also through corona aid. An investor was actually supposed to take over the company and invest fresh capital. This would have required an antitrust investigation, but this was never registered, which shows what stage the negotiations were at. This insolvency was not due to a lack of willingness to travel and bookings from customers.

Regarding the insolvency of GALERIA Karstadt, two questions arise: were the rents of the similarly insolvent owner Signa Holding too high and, in particular, is the business model of the department stores still viable today despite the high proportion of internet retail in the market segments they cover? In the area of clothing, online trade now accounts for around 20 percent of the sales volume, for shoes 25 percent, electronic household goods almost 30 percent and cosmetics 10 percent. In the year 2023 the largest insolvency based on the number of employees was the clothing company Peek & Cloppenburg. Gerry Weber also filed for bankruptcy in the retail sector.

Through the Signa insolvency, companies in the building industry could also find that their invoices remain unpaid and thus also run into problems. Here, the knock-on effects should be expected that often occur through the insolvency of larger companies and sometimes trigger follow-up insolvencies of their own suppliers.

International Perspective

Increasing insolvencies are also expected internationally. The current slow growth of the world economy as well as the consequences of the current conflicts are among the reasons for this. Another is technological change, which is leading to structural reorganization. Germany is not alone in this and is not in an exceptional situation.


It is therefore clear: in the field of supplier credit it is necessary to stay alert and to closely observe the liquidity of customers. The building industry and the retail trade – especially in areas where online retailing now accounts for large percentages of the turnover – are in particular focus. But there is also an increasing tendency for hospitals and care providers to be insufficiently financed or the fixed prices in the regulated market are insufficient to cover the costs. Risk management software can help in taking suitable measures in good time and remaining vigilant across a broad front.

About the Author
Prof. Dr. Matthias Schumann

Since 1991, Prof. Dr. Matthias Schumann has held a professorship in Business Administration and Information Systems (Chair of Application Systems and E-Business) at the University of Göttingen. He also heads the joint computing center of the Faculty of Economics and the Faculty of Social Sciences. He is a shareholder of Prof. Schumann GmbH.

Prof. Schumann's research interests include information systems at financial service providers and systems for credit management, as well as issues related to knowledge and education management. Prof. Schumann has a wide range of experience in consulting companies, extensive lecturing activities and more than 350 publications.

University of Göttingen

Matthias Schumann q