LAccording to the monthly insolvency trend of the Leibniz Institute for Economic Research (IWH), 1,297 companies became insolvent in March – more than ever since the survey began in 2016. This exceeds the negative record of corporate insolvencies recorded in February by 9 percent. In addition, the value is 30 percent above the March average in the years before the corona pandemic.
The IWH regularly evaluates the courts' insolvency announcements and links them with the balance sheet data of the companies affected. Accordingly, 11,000 jobs were affected by the bankruptcies recorded in March. According to the IWH, closures of large employers can lead to permanent loss of income for the affected employees. They can apply for insolvency money from the Federal Employment Agency during the insolvency proceedings. However, insolvencies often lead to significant staff reductions, even if the insolvent company has been restructured and can continue to operate after the process has been completed.
Due to the weakening economy and the changes in the economic world, there have recently been more and more prominent corporate bankruptcies. The attempt to rescue the department store group Galeria Karstadt Kaufhof, which had to file for bankruptcy for the third time in four years in January, is currently making headlines. The insolvency of the Austrian real estate group Signa, which is involved in the German department store chains, is also causing a stir.
The real estate industry, which was still booming a few years ago, is proving to be particularly vulnerable. Many real estate companies are overwhelmed by the increase in interest and construction costs and are slipping into insolvency. But even in the healthcare sector, which is actually considered to be economically resilient, hospital and nursing home bankruptcies have recently increased.
Insolvency researcher Steffen Müller from the IWH expects a high number of corporate bankruptcies again in April. After all, the early indicators indicate that the increase in the number of insolvencies could be slowing down. “This fuels the hope that the number of insolvencies could decline slightly again from May onwards,” says Müller. There is some consolation for employees who lose their jobs due to bankruptcy. Because of the shortage of skilled workers, it has become easier to find another employer.
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