German insolvencies higher than expected in H1, reports Handelsblatt

BERLIN (Reuters) - The number of medium-sized and large companies in Germany that went insolvent in the first half of this year was up 41% compared with the same period last year, the Handelsblatt daily reported, citing inflation, rising costs and weakening demand.

In the first six months of 2024, 162 companies with a turnover of more than 10 million euros ($10.83 million) filed for insolvency, Handelsblatt reported, citing an analysis it had commissioned from restructuring consultants Falkensteg.

The figure is significantly higher than the 30% increase restructuring analysts had expected at the beginning of the year, according to Handelsblatt.

Real estate companies, automotive suppliers and mechanical engineering companies are particularly affected, it said.

The reasons cited for the wave of insolvencies are the pandemic's after-effects, inflation, increasing energy and material costs and weakening demand, while global crises, poor economic prospects and high interest rates make restructuring and investments in ailing firms increasingly unattractive.

Germany's DIHK Chambers of Industry and Commerce said in May that it expects the number of insolvencies to stay on the rise as structural problems such as a shortage of skilled labour continue to have an effect on Europe's largest economy.

The number of insolvencies applied for by companies was up 22.1% year-on-year in 2023, at 17,814 firms, according to federal statistics office data.

($1 = 0.9236 euros)

(Reporting by Katharina Loesche; Writing by Miranda Murray, Editing by Friederike Heine)