Germany records fewer insolvencies for first time in over two years

BERLIN (Reuters) -The number of regular insolvencies in Germany fell by 0.7% year-on-year in May, its first decrease in more than two years, Federal Statistics Office data showed on Friday.

"This was the first year-on-year decline in this leading indicator since March 2023," said the office, without giving an explanation for the fall.

The monthly preliminary figure is based on insolvency announcements from all local courts in Germany.

The office also reported final first-quarter figures on Friday, which showed corporate insolvencies rose by 13.1% as a lack of orders, high costs and global uncertainty cause businesses to struggle.

Germany's DIHK chambers of commerce and industry association said that figure marked the highest number of such insolvencies in the first quarter in 11 years and should be seen as a warning sign.

"A lack of orders and sluggish demand on the one hand, high costs for energy, labour and bureaucracy on the other: All of this is causing many businesses to struggle," DIHK said, commenting on the latest numbers.

"Added to this is considerable uncertainty as a result of U.S. customs and trade policy," it said, referring to an array of tariffs announced by President Donald Trump's administration.

Local courts estimate creditors' claims from the 5,891 corporate insolvencies in the first quarter at around 19.9 billion euros ($22.99 billion), compared with around 11.3 billion euros a year earlier.

The number of consumer insolvencies also rose between January and March, growing by 6.3% to 18,573, said the office.

($1 = 0.8655 euros)

(Reporting by Miranda Murray and Rene WagnerEditing by Tomasz Janowski)