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Using a special predictive model, Coface analysts estimated that around 4,000 non-viable companies could survive 2020 thanks to government support measures. "The financial problems of such companies, however, have not gone anywhere, so they will all go bankrupt in 2021-2022 as state support programmes expire. This means that in terms of the financial health of the corporate sector, the crisis is far from over," they believe.
Analysts estimate that almost 16,000 companies went bankrupt in Germany in 2020, in percentage terms, the sharpest decline since 1975. The start of 2021, as well as the end of 2020, was marked by a record low number of bankruptcies, Coface data shows.
"This positive trend, however, has not been seen in all sectors. Every company applying for state support in Germany has to prove to the authorities that its business model was profitable in the pre-crisis period, i.e. as of December 2019. Since, for example, Germany's steel industry and car industry have been in recession since late 2018, not all companies operating in these sectors have managed to meet the criteria set by Berlin," experts say.
This resulted in an increase in the number of bankruptcies - in the steel industry the figure rose by 7.1% in 2020, in the car industry by 31.6% at once. Among corporate bankruptcies, however, the metallurgy sector accounted for 3% of the total number of bankruptcies in 2020, while the car industry accounted for just under 0.5%. "The vast majority of bankruptcies continue to be in the b2b services, construction, hospitality, retail and transport sectors," Coface noted.
source: coface.com
Analysts estimate that almost 16,000 companies went bankrupt in Germany in 2020, in percentage terms, the sharpest decline since 1975. The start of 2021, as well as the end of 2020, was marked by a record low number of bankruptcies, Coface data shows.
"This positive trend, however, has not been seen in all sectors. Every company applying for state support in Germany has to prove to the authorities that its business model was profitable in the pre-crisis period, i.e. as of December 2019. Since, for example, Germany's steel industry and car industry have been in recession since late 2018, not all companies operating in these sectors have managed to meet the criteria set by Berlin," experts say.
This resulted in an increase in the number of bankruptcies - in the steel industry the figure rose by 7.1% in 2020, in the car industry by 31.6% at once. Among corporate bankruptcies, however, the metallurgy sector accounted for 3% of the total number of bankruptcies in 2020, while the car industry accounted for just under 0.5%. "The vast majority of bankruptcies continue to be in the b2b services, construction, hospitality, retail and transport sectors," Coface noted.
source: coface.com