After ticking upward in December 2020, the number of companies filing for bankruptcy declined in January 2021, and then trended sideways in February. According to the IWH Bankruptcy Update, 715 companies reported bankruptcy last month. This is equivalent to month-over-month growth of 4%. Compared to the February 2020 figure, the number of bankruptcies was 21% lower.

The largest 10% of companies (in terms of headcount) declaring bankruptcy in February employed a total of 8,250 people, according to IWH analysis. This means that 50% more jobs were affected by bankruptcy in February than in January 2021, and 26% more jobs were affected than in February of 2020. By contrast, the number of jobs impacted in the summer months of 2020 was many times higher.

Steffen Müller, IWH’s head of the Department of Structural Change and Productivity and the head of bankruptcy research at IWH, explains Germany’s continued low bankruptcy rates by pointing to the extensive government assistance provided to the private sector, the partial suspension of the obligation to file for bankruptcy, and the fact that many firms entered the crisis healthy. “While the endurance of companies in particularly hard-hit sectors can be questioned, we have yet to witness a dramatic rise in bankruptcy statistics, as predicted by some business surveys,” Müller says. “Leading indicators also fail to show higher bankruptcy rates in the coming months.”