Germany has recorded its highest number of corporate bankruptcies in more than two decades, with nearly 5,000 companies filing for insolvency in the second quarter of 2026, according to the Halle Institute for Economic Research (IWH).

A total of 4,996 companies filed for insolvency in April-June, up 9% from the previous quarter and marking the highest second-quarter figure since 2005, the institute said in a report published on Thursday.

The increase spanned almost all major sectors, including construction, real estate, trade, hospitality, and services, affecting around 45,500 jobs.

In June alone, 1,702 companies filed for insolvency, 20% more than a year earlier and 80% above the pre-pandemic average for the month.

Steffen Muller, head of insolvency research at IWH, said corporate failures remained at an “exceptionally high level.”

“The situation remains challenging: insolvencies are affecting the economy broadly. Many industries and regions are being hit simultaneously,” he said, adding that the institute expects insolvencies to remain above last year’s level in the third quarter.

Germany, the EU’s largest economy, has faced mounting pressure from high energy costs since phasing out Russian oil and gas imports following the escalation of the Ukraine conflict in 2022. The strain has been compounded by a recent spike in crude prices triggered by the US-Israeli war on Iran, adding to pressure on the industrial powerhouse.

The German economy contracted in 2023 and 2024, marking its first back-to-back annual decline in more than two decades, and is projected to grow by just 0.5% this year. Official data shows corporate insolvencies have risen sharply in recent years, increasing by more than 22% in both 2023 and 2024.

The pressure has been particularly severe in manufacturing, especially the automotive sector. Volkswagen workers staged protests on Thursday as the company pushed ahead with a restructuring plan that could reportedly eliminate up to 100,000 jobs and shut factories across Germany.