In the north-eastern German region of Mecklenburg-Vorpommern, 2023 has seen fewer businesses succumb to insolvency, despite the lingering energy crisis, skyrocketing material costs, and climbing interest rates. The credit agency Creditreform expects an insolvency rate of 51 per 10,000 companies in the region, a slight bump from the 40 rate recorded in 2022. Meanwhile, nationwide, the 2023 insolvency rate hovers at 60 per 10,000 firms, according to Creditreform's data shared in Frankfurt.
While Creditreform failed to pinpoint specific factors causing the difference between regional insolvency rates, it suggested that regional industries and the age structure of companies may be partially responsible. Regrettably, Creditreform did not provide further details on these aspects, such as the number of impacted employees or the level of payment defaults.
Several components contribute to varying insolvency rates across Germany. These include factors like regional economic performance, industrial challenges, credit and financial environments, regulatory frameworks, demographic shifts, inflation rates, financial literacy, and historical economic trajectories.
Patrik-Ludwig Hantzsch, the Head of Creditreform Economic Research, pointed out that the relentless surge in energy prices and interest rate adjustments are forcing more companies to the brink of insolvency. As a result, Creditreform expects that the insolvency wave, which temporarily receded due to pandemic-related state interventions, will resurface, with the number of bankruptcies increasing significantly in the coming months.
By the end of 2023, Creditreform predicts at least 18,100 companies will file for insolvency, marking a 23.5% increase compared to the previous year. Bremen, in contrast, boasts a significantly higher insolvency rate of 120 per 10,000 companies in 2023. Meanwhile, neighboring Thuringia, despite a weakened economy, has maintained a lower insolvency rate, reflecting the complexity and nuances that drive such statistics.
In summary, despite the overarching economic hardships, Mecklenburg-Vorpommern reports a lesser number of insolvencies in 2023. While factors affecting regional insolvency rates are varied and multifaceted, they include economic performance, industry challenges, credit environments, regulatory frameworks, demographic shifts, inflation rates, financial literacy, and historical economic conditions.
