Germany recorded 4,573 insolvencies among partnerships and corporations in the first quarter of 2026. That marks a level last seen in 2005, when 4,771 cases were registered. Even during the 2009 financial crisis, the figures were lower. The current rise is also unusually steep. In March, insolvencies stood 71% above the average for the years 2016–2019.
The trend is not confined to the margins of the economy. Construction and retail have been particularly hard hit. Both sectors have faced sustained pressure, as rising financing costs, high energy prices and weaker demand converge. At the same time, consumption has stagnated in many areas, while construction projects have stalled amid higher interest rates and surging costs.
The regional picture underscores the severity of the situation. Bavaria, Baden-Württemberg and North Rhine-Westphalia are reporting record levels. Those are precisely the federal states regarded as industrial centers and long seen as pillars of stability. The fact that insolvencies are rising most sharply there suggests that the problems are no longer limited to individual sectors but are reaching the core of the economy.
Another finding sharpens the picture. The rise in insolvencies is driven primarily by smaller companies. The number of affected employees has recently declined, even as bankruptcies increase. Many smaller firms are therefore giving up earlier, lacking the financial reserves to withstand prolonged downturns. Economists see this as an early warning signal. Small firms tend to react more quickly to economic disruptions. When they fail in large numbers, it often points to a broader deterioration that later reaches larger companies.
