The number of corporate insolvencies in Germany rose 13% year on year in September 2026 to 1,666 cases, according to data released by the Leibniz Institute for Economic Research in the city of Halle on Thursday, amid pressure from energy and financing costs and weak utilisation of production capacity.
Insolvencies rose 9% from August 2026 and were up 85% from September 2019, before the coronavirus pandemic, reflecting continued pressure on Germany’s business sector, particularly industrial companies.
Slight decline in the third quarter
The institute recorded 4,880 insolvencies in the third quarter of 2026, a slight decline of 2.3% from the second quarter. Steffen Müller, the institute’s research director, said insolvencies remained at high levels but expected their number to decline in the final quarter of this year.
The number of jobs affected by insolvencies fell 10% to about 41,000, alongside a decline in the number of companies with large workforces among those that declared insolvency. By contrast, insolvencies in the services sector rose to their highest level since the institute began compiling its statistics in 2020.
The institute’s indicator is based on an analysis of insolvency notices issued by German courts and their linkage to companies’ financial data. It provides an early indicator of economic activity trends, roughly two months before official statistics are released.
Energy and financing costs weigh on companies
German companies, particularly those in the industrial sector, are facing higher energy, raw-material and financing costs, as well as weak utilisation of production capacity and uncertainty linked to geopolitical developments. These pressures are adding to the burden on energy-intensive companies and limiting their ability to make new investment decisions.
Germany’s Federal Ministry for Economic Affairs and Energy estimates that the recovery in private investment remains slow, although it expects a gradual improvement next year amid continued high production and borrowing costs and structural challenges. Supply disruptions caused by the war in the Middle East have also pushed up energy prices and increased pressure on companies and households.
By contrast, German exports benefited in the second quarter from increased purchases of energy-intensive goods, as buyers moved to build inventories amid global shortages. This reflects the differing conditions facing companies: some export-oriented sectors are benefiting from external demand, while others face rising costs and weak domestic demand.
Government raises growth forecast
The German government on Thursday raised its forecast for economic growth in 2026 to 1.3%, from a previous estimate of 0.5%, supported by improved exports and increased government spending. Economy and Energy Minister Katherina Reiche said during the presentation of the autumn forecast that the government expects growth of 1.1% in 2027, before it slows to 0.6% in 2028.
The ministry said the economy posted strong growth in the first half of 2026, driven mainly by exports and government consumption. It expects foreign trade to be the main engine of growth this year, while spending from special funds and defence allocations will support public investment and government consumption in the period ahead.
Despite the improved outlook, the government expects private demand to recover at a slower pace because higher energy prices are affecting household spending, despite growth in real wages. It also linked the economic outlook to developments in the wars in the Middle East and Ukraine: falling energy prices could support the recovery, while persistently high commodity and energy prices would increase the burden on companies and consumers.
