Germany Experiences Record Corporate Insolvencies in 2025, Signaling Economic Stress

In 2025, Germany saw corporate insolvencies reach their highest level since 2005, with a total of 17,604 cases recorded throughout the year, marking the worst insolvency situation in two decades. The manufacturing sector suffered significantly, with approximately 62,000 jobs lost due to corporate bankruptcies, contributing to an overall estimated 170,000 jobs impacted nationwide.

December 2025 alone witnessed a 17% increase in insolvencies compared to the previous month, with 1,519 filings. This figure also represents a 14% rise over December 2024 and a sharp 75% increase compared to December averages from 2016 to 2019. Early indicators suggest that insolvency numbers are expected to remain elevated in the first quarter of 2026.

These findings come from an analysis by the Leibniz Institute for Economic Research Halle (IWH), which tracks insolvency data covering over 90% of affected jobs and 95% of financial claims, making it a reliable barometer of economic distress in German companies. Steffen Müller, head of IWH insolvency research, emphasized that the surge in bankruptcies cannot be solely attributed to lingering effects of the COVID-19 pandemic or previously low interest rates, pointing instead to persistent economic challenges facing the country.

This rise in corporate failures signals significant economic pressure, particularly within the manufacturing industry known for its large workforce. The trend suggests repercussions may continue into early 2026, posing substantial concerns for Germany's economic stability and job market going forward.