Germany Sees Record Corporate Bankruptcies in 2025, Highest in 20 Years

Germany witnessed a surge in corporate bankruptcies in 2025, reaching the highest level in two decades with 17,604 insolvencies reported. This marks a notable increase compared to previous years, with an average of 48 companies filing for bankruptcy daily. The month of December alone recorded 1,519 insolvency applications, representing a 75% rise compared to the December average from 2016 to 2019, highlighting an escalating crisis.

Sectors most affected include hospitality, construction, and real estate, which faced significant strain due to rising interest rates that have been in effect since the end of 2022. The hotel and hospitality industry, in particular, has been hard hit, compounded by economic challenges such as increasing costs for energy, raw materials, and labor, alongside strong competition from cheaper imports.

Large companies have not been spared, with 471 firms reporting revenues over €10 million filing for insolvency—a 25% increase from the previous year. This surge includes businesses in automotive supply, metal manufacturing, and electrical engineering sectors. Notable insolvencies include the Leifert bakery chain and several automotive suppliers, resulting in significant job losses.

Experts like Jonas Eckhardt from Falkensteg consulting have described the situation as a serious crisis, with the German economy suffering from more than just minor difficulties. Professor Dr. Steffen Müller of the Leibniz Institute for Economic Research emphasized that the high insolvency rates are not solely pandemic fallout but rather deep-seated economic troubles. He highlighted that the rising insolvency numbers indicate survival struggles for many small and medium enterprises rather than a temporary downturn.

Looking ahead, specialists anticipate continued economic hardship throughout 2026, with no recovery in sight. They predict that restructuring cases will peak as companies, especially in the automotive and retail sectors, continue facing fierce competition from Asian markets and escalating operational costs.

This record wave of insolvencies reflects a critical juncture for the German economy, underscoring ongoing challenges that threaten the stability of multiple industries and the broader business landscape in the year ahead.