Germany Sees Company Bankruptcies Soar (dw.com) 43
Germany's Federal Statistical Office (Destatis) on Friday said 5,209 companies filed for bankruptcy in Germany in the first three months of 2024 -- with the trend expected to continue. From a report: Experts think the number of corporate insolvencies in Germany will increase to about 20,000 cases this year as part of a longer-term pattern. The latest figure means corporate insolvencies are up 26.5% compared with the first quarter of 2023. They are also 11.2% more than in the first quarter of 2020 when 4,683 corporate insolvencies were filed before the COVID-19 pandemic had its full impact. The coronavirus pandemic period itself saw special, temporary regulations introduced and low insolvency rates.
The transport and warehousing sector accounted for most insolvencies per 10,000 companies, with 29.6 cases at the start of 2024. This was followed by the construction industry with 23.5 cases, and other economic services such as employment agencies on 23 cases. Manufacturing saw 20.3 insolvencies per 10,000 companies. Local courts estimated the creditors' claims from the corporate insolvencies until the end of March was about $12.07 billion compared with $7.16 billion last year. There were also 17,478 consumer bankruptcies in the first quarter of 2024 â" an increase of 4.8% compared to the period in 2023.
The transport and warehousing sector accounted for most insolvencies per 10,000 companies, with 29.6 cases at the start of 2024. This was followed by the construction industry with 23.5 cases, and other economic services such as employment agencies on 23 cases. Manufacturing saw 20.3 insolvencies per 10,000 companies. Local courts estimated the creditors' claims from the corporate insolvencies until the end of March was about $12.07 billion compared with $7.16 billion last year. There were also 17,478 consumer bankruptcies in the first quarter of 2024 â" an increase of 4.8% compared to the period in 2023.
On the other hand (Score:3)
The number of unemployed people is so low (https://de.statista.com/statistik/daten/studie/1223/umfrage/arbeitslosenzahl-in-deutschland-jahresdurchschnittswerte/) that companies have problems finding qualified employees.
Re:On the other hand (Score:5, Interesting)
A "3 year high" isn't a very long time period. Look at a longer time period, [statista.com] or an even longer time period, [ft.com] and the new figure of 5.9%, while a movement in the wrong direction, is still very low.
Of course, if you're trading stocks and trying to stay ahead of day-to-day movements, certainly it's the direction rather than absolute level that matters.
Just goes to show you can find a story that conveys whatever message you want using more or less the same facts, differently framed.
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The entire world has moved in the direction of low unemployment as capitalism, making people rich enough to even have a service industry, has caused great gains in employment. The slide-back however, within the last 2-3 years, both US and EU policy have destroyed about 10 years of gains. First of all, how long will this go on, are we going back to pre-WW1/2 era unemployment (because we all know how Germany acts in a tight spot) and if there is recovery, will it take another 10 years. You're also forgetting
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Labor Force Participation Rate (CIVPART) [stlouisfed.org]
Jan 2020 rate, 63.6
May 2024 rate, 62.5
The absolute peak way back in 2001 was 67.1
We also have been expecting this as the Baby Boomers are hitting their retirement period:
Number of retired workers receiving Social Security in the United States from 2010 to 2023 [statista.com]
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IIRC, retirees are not counted in the participation rate calculations so them retiring should have zero impact on the rate even if the absolute number changes.
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Depends on the stat used, there are a bunch, are we thinking the prime age participation rate? That is actually up slightly since Jan 2020. In the main number retirees are included in the denominator, as in they count in the total civilian population but are not factored into the active labor force so a spike in retirements will drop the LFPR
If we look at prime age LFPR it's slightly up since Jan 2020
https://fred.stlouisfed.org/se... [stlouisfed.org]
And if we look at LFPR for over 55 we see a pretty decent drop in 2020 th
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I'm not saying whether the rate is up or down. I don't have a horse in that race. Only that I thought retirees don't count but yes you make the good point that it matters which stat one looks at.
IMO, the important stat we should look at to determine unemployment rate would be one that only covers working age people, who aren't disabled, in school, etc. Otherwise some odd ball and not useful numbers can come out.
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As I understand it any "Prime Age" numbers reflect that, it starts at 25 so filter out university students and ends at 54 to filter out early retirees.
I am not sure about disability but there are specific numbers for cohorts with disability and not disability.
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Ok then, all good. There's no perfect number but that sounds plenty good enough.
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Lmao, agreement is now trolling on slashdot.
Some of you are hilarious. I wallow in your blind hate.
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The overall labor force participation rate matters too - that's the ratio of workers to nonworkers, all of whom still need to eat 3 times per day.
This report from 2013 [bls.gov] predicts that the overall rate would fall from about 64% at that time to 62% in 2022.
It is now 62% [ycharts.com].
We are heading ba [stlouisfed.org]
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I think we'd be better if we had lower labor participation rates if it was because moms were home raising their kids instead of the nanny while mom climbed the corporate ladder or more likely went to her dead end job.
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Modded down by some poor bastard raised by the nanny or after school program instead of by a loving mother.
Feeling bad for you on this one.
Re: On the other hand (Score:2)
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Fulltime employment is doing fine right now, better than fine in some ways, we are actually still below below pre-pandemic levels for part-time jobholders, including part time for economic reasons
https://fred.stlouisfed.org/se... [stlouisfed.org]
Multiple jobholders also at a steady rate which has been steady the last 20 or so years
https://fred.stlouisfed.org/se... [stlouisfed.org]
Less than 2009 (Score:2, Insightful)
Yeah, it's an economic slump. Globally. We have Peak Globalisation and Peak Digital. The latter not mattering too much in Germany, but still pushing wages down by 10-20%. It looks to me that globally we also have what I would call "Peak Logistics" with shipping costs becoming unsustainable and local industries not yet adopted.
I expect global demographics to to their work from here on out for most 1st world countries in the next few years, be they in Europe or elsewhere.
I'm out of a job, doing some retrainin
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Germany's economy is heavily reliant on exports, which means they are more vulnerable to global downturns than other countries.
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Considering global shipping rates for 40' containers have risen over 30% in the past month [cnbc.com] due to increased demand, Germany's economy should be soaring.
Re:Less than 2009 (Score:4, Informative)
Wouldn't rising costs of exporting stuff be bad for an economy that is reliant on exports?
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Only if the cost of shipping was higher than the profit margin created for shipping those extra goods.
I can ship 100 crates at $10 profit or 200 crates at $5 profit. Same profit.
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Assuming of course that there is demand for 200 crates of your product.
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Germany's economy is heavily reliant on exports, which means they are more vulnerable to global downturns than other countries.
It was also reliant on baseload energy, which Germany has now replaced with wishful thinking. Around here when we need something like those giant steel bridge beams, we have to order them from South Korea.
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Yeah, it's an economic slump. Globally. We have Peak Globalisation and Peak Digital.
It is quite dangerous to assume we have reached anywhere close to "peak" digital. As soon as you do start assuming that, you start igonoring the continued eradication of privacy.
If you think privacy is bad now, we're not even close to the peak of those human abuses. Wait until you can't even walk around your house without being monitored, identified, and authenticated, and then you also find zero privacy when you go outside due to the "safety" drones flying everywhere.
The problem with ignoring crime and l
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Yeah, it's an economic slump. Globally.
It actually isn't. The US is growing fine, China is still growing, and Africa is coming up.
Germany shot itself in the foot with expensive energy (it's now more expensive than on Hawaii!). Coupled with traditionally excessive regulations, their manufacturing is becoming less and less competitive.
Just backlog (Score:5, Interesting)
As mentioned, during Covid-19 there were a lot of regulations in place that allowed companies to continue existing even if they would have had to file for bankruptcy under the usual rules.
That way we built up a backlog of zombie companies. Most of the uptick results from cleaning up the backlog.
If you look for overall payment discipline, that is at an OK level (same as pre-pandemic or better). So this is not worrying.
Between the approaching climate disaster (which will hit us most likely very hard) and the rise of the right wing parties (which want to slaughter the EU goose that lays the golden economic eggs), I don't have CPU cycles to spare for that worry.
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Why do you think populist parties are rising in several EU countries?
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Economics is a big part of it, the general anti-immigrant sentiment has also been brewing for awhile (Europe does a lot of things well but they do not integrate immigrants like the USA).
I personally think Macron's snap election, while a gamble, is pretty brilliant because I think he's effectively saying "if you idiots want to also go ahead and Brexit yourselves let's just cut to the chase already"
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Social Darwinism integrates better than welfare.
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My boss says the payment discipline became significantly worse this year.
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How this gets labeled +4 interesting I'll never understand. Have you asked yourself the reason for the rise of those "right wing" parties? Could it be a combination of mass immigration(driven by the pyramid scheme pension funds) and failure to assimilate(driven by c
double whammy: Russia and China... (Score:3)
No more cheap resources from Russia - after counting in destruction in Ukraine they are no longer cheap anyway
And China pushing out Germany from their key export markets with cars, machinery and other more advanced stuff..
And probably triple: cheap labour in former communist countries like Czechia, Poland, Slovakia where Germany outsourced lower value work is gone..
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Indeed the 'strong man of Europe' is going be marching into a lot of headwind.
high compliance costs (Score:3)
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government solutions to every problem, and government knows best
That's a typical Left leaning attitude. That might explain why they voted against the liberals in the latest election. [apnews.com]
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Bof, this seems to be Germany only. In an issue of Scientific American from 1918 or 1919, I think, there was an article, with examples, of these kinds of laws in Germany. I don't think it has anything to do with left or right (which are outdated and meaningless terms anyway).
Re:high compliance costs (Score:4, Informative)
Paragraph 28b IfSG allowed leaving the house during lockdown for taking care of animals.
And leaving the house was forbidden only between 10pm and 5am.