Nearly 200,000 German Companies Shut Down in 2024

According to a joint study by the Center for European Economic Research (ZEW) and Creditreform credit agency, the total number of closures reached 196,100, marking a 16% increase compared to the previous year.

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Factory

This is the highest figure since 2011, when the German economy was still reeling from the effects of the global financial crisis.

The closures occurred across all sectors of the economy, but the most acute impact was observed in energy-intensive industries, where the number of closures rose by 26%. Around 1,000 companies in these sectors ceased operations.

A significant decline was also recorded in the high-tech services sector—around 14,000 businesses closed, up 24%year-on-year.

The most alarming statistic came from the chemical and pharmaceutical industries, where 360 companies shut down in 2024—the worst figure in two decades, according to ZEW.

Analysts attribute this trend to several factors, including:

• high geopolitical instability,
• fierce global competition,
• excessive administrative regulation,
• a shortage of skilled labor driven by demographic shifts.

One of the main blows to the German economy has been the rising cost of energy, linked to the cessation of Russian gas supplies, which deepened the energy crisis and increased operating costs—especially for energy-intensive sectors.

Germany’s economy has shown signs of stagnation in recent years. According to the Federal Statistical Office, the country’s GDP contracted by 0.3% in 2023, and remained virtually unchanged in the first quarter of 2024—indicating a prolonged economic slowdown.

Industrial output is also in decline: in March 2024, production fell by 3.4% compared to February.

The labor shortage is being worsened by an aging population: by 2030, Germany could face a shortfall of more than five million workers, according to forecasts from the German Economic Institute (IW). This puts pressure on businesses—particularly small and medium-sized enterprises, which struggle to compete with large corporations for talent.

Altogether, these factors create an unfavorable environment for doing business in Germany, leading to the rise in closures. Economists stress that without structural reforms and adaptation to new geopolitical and energy realities, recovery in business activity will be extremely difficult.

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The economy of Germany is a highly developed social market economy. It has the largest national economy in Europe, the third-largest by nominal GDP in the world, and the sixth-largest by PPP-adjusted GDP. Due to a volatile currency exchange rate, Germany's GDP as measured in dollars fluctuates sharply, but it is among the world's top 4 since 1960. In 2025, the country accounted for 23.7% of the Euro area economy according to the International Monetary Fund (IMF). Germany is a founding member of the European Union and the eurozone. Germany is the third-largest exporter globally with $1.66 trillion worth of goods and services exported in 2024. In 2024, Germany recorded a trade surplus worth $255 billion, ranking 2nd worldwide. The service sector contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%. Exports accounted for 50.3% of national output. The top 10 exports of Germany are vehicles, machinery, chemical goods, electronic products, electrical equipment, pharmaceuticals, transport equipment, basic metals, food products, and rubber and plastics. Germany is the largest manufacturing economy in Europe, contributing around one third of all manufacturing in Europe, which makes it more resilient to global economic crises. Germany conducts applied research with practical industrial value and sees itself as a bridge between the latest university insights and industry-specific product and process improvements. It generates a great deal of knowledge in its own laboratories. Among OECD members, Germany has a highly efficient and strong social security system, which comprises roughly 25% of GDP.