Bad news about the German economy. In June, the rate of bankruptcy For personal companies and public limited companies in Germany was 80% higher than in June 2016 to 2019, i.e. the period prior to the coronavirus pandemic.
The above results from a study by the Leibniz Institute of Economic Research in the city of Hale (IWH).
Individual enterprises, professions and small enterprises were not included in the survey as they do not matter to the labour market. According to Stephen Miller, head of the IWH bankruptcy investigation department, the number of business bankruptcies in the second quarter of 2026 is at the highest level in the last twenty years.
Tens of thousands of jobs lost
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As quoted in Deutsche WelleThe German economy has been in unstable condition for years. The recovery originally planned for this year will probably lead to a small development. Companies move on to mass redundancies.
At the same time, 100,000 jobs could be lost in the coming years. The ZF car parts supplier plans to remove 14,000 jobs by 2028. And in Bosch, only Germany, more than 20,000 jobs are expected to be abolished by 2030.
However, not only does the industry seem to be affected car industry. This year up to 100,000 jobs are expected to be lost again in the industrial sector, in the car industry, but also in the engineering and construction sector, according to a study by consultant Horváth.
The positive messages
In some respects bankruptcy can also have a positive impact. When non-productive enterprises leave the market, labour force, capital and know-how are released and can be directed towards productive sectors of the economy. This is how growth is created according to the principle of «creative destruction» Joseph Schumpeter.
At the same time, according to the Federal Statistical Office, over 10% more companies were established in the first quarter of 2026 than in the previous year. «Indeed, for many years we have seen an increase in the number of start-ups aimed at growth»Stephen Miller says.
«That's good news. Many are active in the field of artificial intelligence and this is certainly a ray of hope», supplement. And this suggests that the country is in a phase of structural change.
Certain sectors affected
The reasons for bankruptcy are varied. «A year and a half ago, there were a number of cases of bankruptcy in the industrial sector.»Stephen Miller points out.
The construction sector and the residential construction sector have been particularly affected, solely because of the change in interest rates. The focus sector is facing problems due to the increase in the minimum wage, while high-energy enterprises are facing problems due to the increase in energy prices. And the commercial sector is affected by the change in consumer habits.
Finally, the German expert estimates that: «... is not just a restructuring of the market, but indeed a question of the direction the German economy will follow in the future.»However, it states that «We are not yet at a stage where there are massive transmission phenomena or where banks may find themselves in a difficult position but we are in the midst of an important process of structural change.».
