So many craft insolvencies as since 2014 - German craft sector faces worst crisis in a decade as insolvencies spike
German craft businesses faced their toughest year in over a decade in 2025. Insolvencies surged by 13.3%, reaching 4,950 cases—the highest since 2014. Rising costs and weak demand have pushed many firms to the brink.
For years, insolvencies in the craft sector had been declining. After hitting a low in recent periods, numbers began creeping up again. The sharp increase in 2025 marks a reversal of this trend.
Energy, material, and labour costs have squeezed profits, leaving many businesses struggling with cash flow. Construction and energy-heavy trades felt the pressure most acutely. At the same time, sluggish consumer spending and a weak construction market cut into orders.
The last time insolvencies approached these levels was in 2014, when around 5,000 craft firms collapsed. While the sector had seen gradual improvements since then, 2025 brought a sudden and steep rise in failures.
Despite the downturn, some optimism remains for 2026. Around 27% of craft businesses expect higher revenues next year. However, the sector still faces ongoing challenges from high costs and uncertain demand.
