The number of companies that closed in Germany reached almost 190,000 in 2025, marking a 10% increase from the previous year as economic uncertainties, high costs and skilled labor shortages drove the upward trend.

Sandra Gottschalk, author of the Leibniz Centre for European Economic Research report, stated that US tariff policies, competition from Chinese imports and rising energy and personnel costs fueled this negative trend, according to a joint report by the ZEW Institute and Creditreform.

Gottschalk noted that businesses with medium credit ratings also closed, showing that companies ceased operations before facing severe financial difficulties.

The hospitality sector experienced the highest surge in closures, jumping 15% to approximately 15,000 businesses in 2025.

The construction and manufacturing industries were also significantly affected, seeing 24,000 and 11,000 closures, respectively.

About 11,000 healthcare businesses shut down, with medical practice closures skyrocketing 23% to 5,500 due to doctors retiring without successors.

Energy-intensive industries showed a minor recovery as closures dropped slightly, but experts expected the consequences of the Iran war to increase closures in 2026.

Formal insolvencies accounted for only 13% of all closures, while voluntary shutdowns and inactive companies made up the vast majority.

Retirements drove 29% of voluntary closures among owner-managed family businesses in 2025 as the country faced demographic shifts.

Patrik-Ludwig Hantzsch, spokesperson for Creditreform, also said: “The number of businesses leaving the market is rising significantly.

“Large companies and corporate groups are currently dominating the news.”

However, the number of small and medium-sized enterprises that are quietly disappearing is many times greater, he added. (AA)

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