The poor economic situation is reflected in the increasing number of corporate bankruptcies, not only in Germany – but also in Europe. Overall, the number of insolvencies rose again significantly in 2024. This is confirmed by the current analysis by Creditreform Economic Research. The number of cases increased by 12.2 percent compared to the previous year, reaching a total of 190,449 (2023: 169,792) – the highest level since 2013.
Insolvencies at their highest level in ten years
The number of corporate insolvencies in Western Europe rose again significantly in 2024. This is shown by a recent analysis by Creditreform Wirtschaftsforschung.
According to the analysis, the number of cases increased by 12.2 percent compared to the previous year, reaching a total of 190,449 cases (2023: 169,792) – the highest level since 2013.
"Three years of stagnation and economic slump have gripped not only Germany. Europe as a whole is suffering from weak economic development. Significantly intensified competition has led to a significant increase in insolvencies. These bankruptcies are by no means purely a catch-up effect from the coronavirus period. Since the previous low in 2021, the number of corporate bankruptcies in Western Europe has risen by almost 70 percent – and a further increase is on the horizon," explains Patrik-Ludwig Hantzsch, Head of Creditreform Economic Research in Neuss.
"High interest rates, rising energy prices, overall weak demand, and geopolitical uncertainties have strained the stability of many companies. Small and medium-sized enterprises, which often have limited financial reserves, were particularly affected," adds Gerhard Weinhofer, Managing Director of Creditreform Austria.
Broad increase in almost all countries
Insolvency rates increased in 15 of the 17 Western European countries examined. Declines were recorded only in Denmark and the United Kingdom. The increase was particularly strong in Greece (plus 42.5 percent), Ireland (plus 32.0 percent), and the Netherlands (plus 31.7 percent). Significant increases were also recorded in the major economies of Germany (plus 22.5 percent), France (plus 17.4 percent), and Italy (plus 8.9 percent). In almost all of the countries examined, the current case numbers are now well above the 2019 level, which serves as a benchmark from the pre-coronavirus pandemic period.
"With the expiration of the pandemic-related special regulations, the expected catch-up effect has materialized. However, the fact that the number of insolvencies is now significantly higher than pre-coronavirus levels is also related to a series of ongoing crises and structural failures of the past. Companies have little opportunity to recover and develop further," explains Hantzsch.
Construction industry particularly affected
The construction industry was hit hardest in 2024, recording growth of 15.4 percent. Rising construction costs, high financing costs, and weakening demand increased the economic pressure on the sector.
The number of insolvencies in the services sector also saw an above-average increase of 14.2 percent. In manufacturing, the increase slowed compared to the previous year, rising to 9.3 percent (trade, up 8.1 percent).
"The construction industry is one of the main victims of the current economic downturn. This sector's share of insolvencies has already increased in recent years. Nearly one in five corporate insolvencies in Western Europe now entails this sector," Weinhofer said. The share of retail, on the other hand, has declined slightly to 30.0 percent – an indication of the beginnings of consolidation in this sector.
Development in Central and Eastern Europe
The number of corporate insolvencies also increased in most Central and Eastern European countries, although in many cases the number of cases is still below the 2019 level. The increase was particularly significant in Poland, Latvia, Slovenia, Lithuania, and Estonia. However, a sharp decline in Hungary had a noticeable impact on the overall picture: With 39,681 registered cases, the total number of insolvencies in Eastern Europe was significantly lower than the previous year's figure of 64,917.
In Turkey, the number of business closures rose by 20.9 percent to 32,591 cases. This was the sixth consecutive increase. A strong increase was recorded in the retail sector.
“Frequent causes of corporate insolvencies in Eastern Europe are difficult economic conditions, financing difficulties, increased costs and weak purchasing power,” adds Hantzsch.
Source: Creditreform
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