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Wave of insolvencies in 2025: medium-sized businesses are fighting for survival!
Insolvencies in Germany are reaching record levels, especially among medium-sized businesses. Companies are struggling with rising costs and weak demand.
Wave of insolvencies in 2025: medium-sized businesses are fighting for survival!
In the first half of 2025, the mountain of bankruptcies will pile up, with 11,900 companies having to throw in the towel. This represents an increase of 9.4 percent compared to the previous year and is the highest number in a decade. As [Welt] reports, this impressively shows the tense situation in which medium-sized businesses in Germany find themselves. Companies are faced with weak demand, rising costs and uncertainty.
The threat to jobs is just as serious: around 141,000 jobs are at risk, a worrying increase of 6 percent compared to last year. Small businesses with fewer than ten employees are particularly affected, accounting for a large share of bankruptcies at 80 percent. Insolvencies in particular in the manufacturing sector increased by 17.5 percent, while the retail sector struggled by 13.8 percent. This shows that the challenges are felt across sectors.
Crisis hits medium-sized businesses
Christiane von Berg, chief economist at Coface, said in a [Creditreform] podcast that the economic stagnation since 2019 has dragged many companies into the abyss. The total number of bankruptcies last year was 21,812, an increase of 22.4 percent. These challenges not only involve company closures, but also affect the entire industry. Many companies have secured their existence for at least three years, but despite this experience are now forced to file for bankruptcy.
The mood in the industry is subdued: major players such as Volkswagen and Bosch are planning job cuts. When asked what entrepreneurs can do, experts advise diversification and increased use of their own expertise instead of waiting for political decisions. Finally, the service sector, which accounts for around 70 percent of economic output, is not immune to this development.
Impact on the automotive industry
The automotive industry is under particular pressure. According to [Welt], the industry has been hit hard by weak demand and rising costs, which is leading to a rise in bankruptcies and could result in widespread job cuts and production relocations in the industry. The situation in the construction industry is no better: high costs for financing and building materials as well as a shortage of workers are severely affecting the sector.
The overall economic situation remains tense. Experts predict that the number of insolvencies will continue to rise, and the willingness of creditors to support restructuring measures is decreasing more and more. A new start through insolvency, which could once have offered prospects, is becoming increasingly unlikely for many companies.
Looking forward, the coming months will be critical to see if trends continue or if there is housing for hope and economic growth. The composition of the corporate sector as well as further developments in industry and the service sector will be decisive factors here.