Share of German Companies Whose Survival Is Threatened Rises

At present, 6.8% of German companies feel their economic survival is threatened, finds an ifo Institute survey. In the previous survey conducted in January 2023, it was 4.8%. “The current phase of economic weakness is leading to a growing number of corporate insolvencies,” says Klaus Wohlrabe, Head of Surveys at ifo. “But there’s not yet any indication of this turning into a larger wave.”

In construction, the share rose from 5.1% to 8.9%. This marks the highest proportion in that sector since the question was first included in June 2020. “Residential construction is experiencing a severe crisis, which is causing problems for some construction companies,” Wohlrabe says.

Economic worries are particularly common among transport and logistics companies (14%), recruitment agencies (13.9%), and the energy-intensive chemical industry (12.5%). Retailers also remain particularly affected, with 10.3% of companies reporting they feel their economic survival is threatened (January: 8.3%). “Many retailers are still feeling consumers’ reluctance to spend,” Wohlrabe says.

A good 35% of the companies that reported that their survival was under threat cited a lack of demand or orders as the reason. Other reasons included a difficult economic environment (27%), inflation (24%), and current political action (14%).