In cooperation with the Leibniz Center for European Economic Research (ZEW) in Mannheim, Germany’s Creditreform agency completed a survey showing that 187,744 companies went out of business last year—the highest number in nearly 20 years. A higher number of business closures nationwide was reported in 2007, with nearly 208,000.
“The crisis is now eating its way through the entire breadth of the economy,” says Patrik-Ludwig Hantzsch, director of Creditreform’s economic research department. “Unlike in previous years, even companies that are essentially healthy are now ceasing operations.” In the industrial sector, approximately 11,000 companies were affected—10 percent more than a year ago. “More and more businesses are closing because business owners are retiring and cannot find a successor,” Hantzsch said, noting that while not an insolvency in the strict sense, the refusal or hesitancy by the young generation to lead an industrial company, affecting almost 4,000 companies, is a crisis symptom of a high degree, indicating spreading economic pessimism. This corresponds to recent surveys showing that domestic investments of companies into machines are down, because entrepreneurs fear the costs of that won’t be compensated by new revenue.
