Germany Sees Record High Corporate Insolvencies in 2025, Impacting Thousands of Jobs

In 2025, Germany experienced the highest corporate insolvency figures since 2005, marking a troubling economic development with significant repercussions across the manufacturing sector and broader labor market. According to analysis by the Leibniz Institute for Economic Research Halle (IWH), the total number of insolvencies for businesses and individuals reached 17,604 – the largest amount in two decades and about 5% higher than levels seen during the 2009 financial crisis.

The manufacturing industry was particularly affected, with approximately 62,000 jobs lost due to corporate failures. In total, an estimated 170,000 jobs were impacted across sectors. December 2025 alone witnessed 1,519 insolvencies, a 17% rise from November and a staggering 75% increase compared to the average December figures from 2016 to 2019. Early indicators suggest these high insolvency rates are likely to continue into the first quarter of 2026.

Steffen Müller, head of insolvency research at IWH, indicated that this surge cannot be explained merely by pandemic-related effects or low-interest rate policies. Instead, the data reflect broader, ongoing economic challenges facing Germany. The IWH’s insolvency trend is a reliable early indicator covering over 90% of affected jobs and 95% of claims, thus providing a strong signal of the country's economic health.

These insolvency figures, particularly in manufacturing, underscore deep vulnerabilities in key parts of Germany's economy. The persistent rise in bankruptcies suggests that businesses continue to struggle amid shifts in the economic landscape as the country moves forward into 2026. Policymakers and industry leaders may need to consider targeted interventions to mitigate further job losses and support business stability.