Concerns about company closures in Germany are increasing: it has risen to 8.1%.

Germany Economic Report: Companies Face Risk of Closure

Many companies in Germany are facing serious concerns about their ability to sustain their operations due to order shortages. The country's leading economic organization, the Institute for Economic Research (Ifo), has announced the results of its survey conducted in October.

Economic Concerns are Rising

According to Ifo's data, the percentage of German companies worried about their ability to continue operating has risen to 8.1%. This rate was only 7.3% in October of the previous year.

In a statement from Ifo, it was noted, "Companies across all sectors are viewing order shortages as the greatest threat to their survival. This situation leads to serious liquidity difficulties."

Impact of Costs and Bureaucracy

Companies are also under pressure due to rising operating and personnel costs. The lack of demand negatively affects sales, while high bureaucratic obligations create an additional problem.

Situation in the Retail Sector is More Difficult

In particular, survival concerns are more intense in the retail sector. It is reported that 15% of companies in this sector are facing severe economic issues. In October of the previous year, this figure was recorded at 13.8%.

In further detail, the threat level in the service sector has reached 7.6%, with a decline to 5.8% expected by October 2024. In the manufacturing sector, the rate has fallen from 8.6% to 8.1%.

Bankruptcy Rates Will Remain High

Ifo Survey Center Director Klaus Wohlrabe stated, "We expect that the number of company bankruptcies will continue to remain at high levels in the coming months. Many firms are under significant pressure due to new order shortages, weak demand, and increasing international competition."

According to another Ifo survey published on October 11, 41.5% of companies in Germany reported order shortages. This figure reflects an increase of 2.1 percentage points from the 39.4% level reported in July.