German Economy Lost Close to 200,000 Companies in 2024
ResearchStrong Increase in Closure Numbers in All Industries
More and more companies in Germany are going out of busi-ness. These are the findings of a survey conducted by ZEW Mannheim in collaboration with Creditreform. According to the survey, the number of company closures in 2024 rose by 16 per cent compared to the previous year. A total of 196,100 companies across Germany have ceased operations – the high-est figure since 2011, when many firms were forced out of business as a result of the financial crisis.
“The closure numbers are alarming in all sectors of the econo-my. We haven’t seen such high figures for 14 years. Industrial companies in particular are suffering from high energy costs in production, while competitive pressure from foreign suppliers is increasing,” explains Patrik-Ludwig Hantzsch, head of Eco-nomic Research at Creditreform. In the energy-intensive industries alone, 1,050 company clo-sures were recorded – equivalent to an increase of 26 per cent year on year. In the chemical and pharmaceutical industries, 360 companies went out of business, setting a record for the past 20 years.
No future for technology services in Germany?
In the area of technology-intensive services, too, the number of closures rose at an above-average rate of 24 per cent. These include IT, product development, environmental technology and diagnostics. Around 13,800 companies in this sector closed in 2024.
“This sector should actually be growing as an industry of the future. But the serious shortage of skilled labour and the result-ing bottlenecks are forcing businesses to compete for scarce resources. As a result, they cannot accept a sufficient number of orders to operate profitably,” explains Dr. Sandra Gottschalk, Senior Researcher at ZEW Mannheim.
No capacity for “turbocharging” housing construction
The negative trend also continued in the housing industry: The number of closures here rose by 20 per cent. Around 9,700 companies left the market in 2024 alone.
“Capacity in the housing market is shrinking – partly due to a lack of young skilled workers. This is bad news for the new German government, which actually announced in the coalition agreement that it would ‘turbocharge’ housing construction,” Hantzsch adds.
The tense situation in the health care sector is also reflected in rising closure numbers. Around 10,800 businesses left the market in 2024, equivalent to an increase of around 8 per cent year on year. This is likely to result in continued decline in the nationwide availability of pharmacies and medical practices.
More closures by large companies
The strong increase in the number of closures of larger, eco-nomically active companies is striking. This trend has contin-ued for three consecutive years, with around 4,050 such com-panies discontinuing operations in 2024 – almost twice as many as in an average year.
“This is a clear warning signal to economic policymakers. Many companies are relocating their production abroad, clos-ing sites or no longer investing in Germany at all,” Hantzsch warns, adding that the German economy will increasingly suf-fer a loss in substance and know-how.
Among smaller, predominantly owner-managed enterprises, the number of closures has recently risen only moderately. In many cases, the cause is not economic difficulties, but demo-graphic change: More and more owners from the baby boomer generation are reaching retirement age without finding suitable successors.
“For many young people, dependent employment appears more appealing and financially rewarding than pursuing self-employment,” Gottschalk adds.
