German Manufacturing Collapses as Major Insolvencies Surge to Record Highs in 2025
Germany’s manufacturing sector is facing severe pressure as corporate bankruptcies hit a record high in 2025. A total of 471 major insolvencies were recorded among firms with annual revenues above €10 million, marking a 25% rise from the previous year and nearly three times the number seen in 2021.
The crisis is spreading beyond traditional high-risk sectors, with metal goods producers now leading insolvency figures, overtaking auto suppliers. Electrical engineering industries are also experiencing a sharp increase in failures.
Weak consumer demand, geopolitical instability, and deep structural problems in key industries are driving the surge in bankruptcies. Labour shortages, soaring energy costs, and excessive bureaucracy have worsened the situation. Many mid-sized businesses, once stable, are now struggling to survive.
Overcapacity, shrinking profit margins, and sluggish investment have hit metal goods producers and electrical engineering firms hardest. These sectors, previously resilient, are now at the center of the crisis. Government stimulus from infrastructure projects has done little to ease the strain, leaving a recovery unlikely in the near term.
Experts warn the trend will continue. Forecasts suggest another 10% to 20% rise in major insolvencies next year. By 2026, the total number of large-scale bankruptcies could exceed 500, with projections pointing to around 530 cases.
The rising insolvencies signal a shift from a temporary downturn to a long-term structural collapse for many German businesses. Without significant intervention, the economic challenges are expected to deepen. The manufacturing sector, in particular, faces an uncertain future as financial pressures mount.
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