Nearly 190,000 German firms shut down in 2025

Nearly 190,000 German companies closed in 2025, a 10% increase from the previous year, highlighting the growing pressure on Europe’s largest economy from weak economic conditions, rising costs and an ageing population.

The figures, calculated by the ZEW institute and Creditreform, show the second consecutive significant annual increase in business closures. Only about one in eight closures resulted from insolvency, with many companies shutting because of skilled-worker shortages, high costs or a lack of successors, according to Bloomberg.

“The renewed rise in the number of business closures shows that the pressure on the German economy to adapt has continued to increase,” ZEW researcher Sandra Gottschalk said. “Demographic trends are becoming increasingly significant. More and more companies are closing because their owners are retiring and can’t find successors, even though these companies would otherwise be viable.”

Germany has faced years of economic stagnation, prompting Chancellor Friedrich Merz’s government to pursue major spending and reform packages aimed at reviving growth.

The industrial sector remains under particular pressure. About 11,000 industrial companies closed in 2025, while sectors including hospitality and healthcare also recorded increases of more than 10%.

Germany’s flagship car industry continues to face job cuts, partly because of intensifying competition from Chinese manufacturers. Higher energy costs linked to the Iran conflict and low water levels on the Rhine have added further pressure on businesses.

“Large companies and corporations are currently dominating the news,” said Creditreform spokesman Patrik-Ludwig Hantzsch. “However, the number of small and medium-sized businesses that are quietly disappearing is many times greater.”

By Sabina Mammadli