Nearly 190,000 Businesses Shut Down in Germany as Economic Pressures Intensify

By Staff, Agencies

Almost 190,000 businesses closed across Germany in 2025, representing a 10% increase from the previous year as companies faced growing economic uncertainty, high operating costs and shortages of skilled workers.

According to a joint report by the Leibniz Centre for European Economic Research [ZEW] and Creditreform, US tariff policies, growing competition from Chinese imports and rising energy and labor costs contributed significantly to the increase.

Sandra Gottschalk, who authored the ZEW report, noted that businesses with medium credit ratings were also among those shutting down, indicating that many companies exited the market before reaching a severe financial crisis.

The hospitality sector suffered the sharpest increase, with closures rising by 15% to around 15,000 businesses in 2025.

The construction sector recorded approximately 24,000 closures, while manufacturing saw around 11,000 businesses shut down.

Healthcare was also heavily affected, with roughly 11,000 businesses closing. Medical practice closures surged by 23% to approximately 5,500, largely because doctors retired without successors to take over their practices.

Energy-intensive industries showed limited signs of improvement, with the number of closures declining slightly. However, experts warned that the economic consequences of the war involving Iran could contribute to a further increase in business closures during 2026.

Only about 13% of the closures were formal insolvencies, while voluntary shutdowns and inactive companies accounted for the overwhelming majority.

Demographic changes are also playing a major role. Retirement accounted for 29% of voluntary closures among owner-managed family businesses in 2025, highlighting the growing succession problems facing Germany's aging business community.

Patrik-Ludwig Hantzsch, spokesperson for Creditreform, warned that the deterioration extends far beyond the major corporate names dominating headlines.

“The number of businesses leaving the market is rising significantly.

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

However, he added that the number of small and medium-sized enterprises quietly disappearing from the German economy is many times greater.