After a significant decline in company bankruptcies in the second Corona year, there are now signs of a turnaround.

The district courts reported fewer corporate insolvencies in January than a year earlier.

However, according to preliminary figures from the Federal Statistical Office on Thursday, the standard insolvencies applied for in March rose by 27.0 percent compared to the previous month.

Experts expect insolvencies to increase this year, also because special rules to prevent a wave of bankruptcies in the pandemic have expired.

Added to this are the economic consequences of the Ukraine war, which are not yet foreseeable.

Many companies are groaning above all from exploding energy prices, but supply chains are also disrupted.

With an aid package worth billions, the federal government wants to relieve companies that are particularly affected by the consequences of the Ukraine war and high energy prices.

Among other things, the package provides for a loan program via the state development bank KfW and energy cost subsidies for companies.

"The energy cost subsidies presented by the federal government will not be able to prevent many imminent insolvencies, especially in medium-sized companies, if energy prices continue to rise for a longer period of time," said Christoph Niering, chairman of the professional association of insolvency administrators and administrators in Germany.

Industry is particularly affected

At the same time, he pointed out that the March forecast of the Federal Statistical Office with the 27 percent increase is within the usual annual fluctuations.

In February there had already been an increase of 4.2 percent compared to the previous month.

As an early indicator, the number gives information about future developments, the authority explained.

However, the data did not show the reliability of official statistics.

The Leibniz Institute for Economic Research Halle (IWH), which publishes a monthly insolvency trend, expects the numbers to rise in the coming months.

"For several months, the insolvency process has been significantly more influenced by the manufacturing industry," explained IWH expert Steffen Müller.

The effects of the Ukraine war are not yet reflected in the current figures.

"But increased energy costs as a result of the war are likely to weigh heavily on the industry."

In January 2022, the German district courts reported 1,057 corporate insolvencies.

That was 4.6 percent less than a year earlier and around 34 percent less than before the corona pandemic in January 2020.

In order to avert a wave of bankruptcies as a result of the pandemic, the state had temporarily suspended the obligation to file for bankruptcy in the event of over-indebtedness or insolvency.

Since May 1, 2021, the obligation to file for insolvency has again applied in full.

There were exceptions until January 31, 2022 for companies that suffered damage from heavy rain or flooding last summer.

Last year there were fewer company bankruptcies than at any time since the current insolvency code was introduced in 1999.