Corporate insolvencies 2011
Corporate insolvencies drop by 6.2 per cent as in comparison with the previous year/Bürgel forecasts a further decline in 2012 – Exception: Young companies threatened
Meanwhile the failure rate of young companies – enterprises actively trading in the market for less then two years – has become alarming. In comparison with the previous year 2010, an increase by 34.5 per cent was noted. The main cause that leads to the accumulation of insolvencies in this segment is that the company founders are forced to deal with manifold problems – in the initial phase mainly capital backing and financing difficulties, changes within the market and strategic incorrect decisions. All in all, about one fourth of all insolvent companies (26.6 per cent or 8,058 companies) were operating for less than two years in the market.
In an absolute comparison of 2011 each fourth insolvent company (6,786 cases) statistically comes from North Rhine-Westphalia. Bavaria (3,794) and Lower Saxony (3,148) also show high values. In relative terms, relating to the company density, 88 per 10,000 companies in the national average went bankrupt in 2011. The southern Federal States were effected the least – particularly Bavaria (64 insolvencies per 10,000 companies), followed by Baden- Wuerttemberg (65). With 138 cases per 10,000 companies Bremen records the worst results. But also in Saxony-Anhalt (112), Lower Saxony and Berlin (each 105) the insolvency rates are very distinctive.
In 15 of the 16 Federal States the number of company insolvencies declined. The only exception is North Rhine-Westphalia with an increase by 3.6 per cent as in comparison with 2010. The greatest drop by minus 15.4 per cent was noted in Saxony-Anhalt – closely followed by Baden-Wuerttemberg (minus 13.9 per cent) and Schleswig Holstein (minus 13.8 per cent).
Whilst the Bürgel survey categorises the young companies to be endangered, the number of companies active in the market for over 50 years dropped in comparison with the previous year. All in all, the “senior” companies only have a stake of 2.2 per cent in the corporate insolvency statistics. With regard to the company legal form, the trade professionals (share: 44 per cent) and private limited companies (34.8 per cent) are most affected by corporate insolvency. Based on the industry classification service providers in particular were forced to give up business. In this segment 15,305 companies are concerned. This value corresponds to more than half (50.5 per cent) of all insolvencies in 2011. The industrial sectors trade (share: 22.1 per cent of insolvencies) and construction industry (14.3 per cent) are also particularly affected by corporate insolvencies.
The causes for insolvency are firstly the absence of new orders or the cancellation or postponement of already placed orders. Second of all domino effects cause insolvent companies to drag other companies to insolvency. “Even healthy companies can end up in a precarious economic situation, as about 20 per cent of the insolvent companies are affected by domino effects”, Dr. Sellin explains. Thirdly the still restrictive credit approvals by the banks threaten company existences – especially of small and young enterprises. Fourthly, intra-company mistakes as well as lacking equity capital in conjunction with financial difficulties are responsible for an increased insolvency risk. Also a misinterpretation of the market or the lack of competitiveness can lead to company failure.
CRIF Bürgel GmbH
With 60 offices in Germany Bürgel Wirtschaftsinformationen GmbH & Co. KG is one of the
leading agencies for financial and credit information and debt collection services. BÜRGEL
is a subsidiary of the Euler Hermes Kreditversicherungs-AG (Allianz Group) and the KG EOS
Holding GmbH & Co. KG (Otto Group).