Corporate Insolvencies on the Increase: Economic and Structural Influences Drive a Trend Reversal

However, a rise in insolvency cases of almost one-fifth is expected in 2023, a trend which is likely to continue in 2024. This uptick is being fuelled by high energy prices, rising interest rates and a struggling economy. Yet given the need to transform German business so as to eventually achieve climate neutrality, insolvencies should not be viewed as a purely negative phenomenon. Company closures are part of an indispensable restructuring process whereby resources are freed up in industries that are shrinking, only to be put to a new, economically more efficient use by companies, and indeed whole sectors, which are expanding. Skilled labour is one of the currently scarce resources to which this principle particularly applies.