[Shutterstock/FOTOGRIN]

Germany saw more businesses shut down in the first half of this year than in any year over the past decade, according to a new report by Creditreform.

About 11,900 companies closed their doors, up 9.4% from last year. That left 141,000 employees out of work.

Why is this happening?

• Weak demand – People and businesses aren’t spending as much.

• Higher costs – Expenses keep rising, cutting into profits.

• Economic uncertainty – Companies don’t know what’s coming next.

Germany has been in a two-year recession, and experts warn things could get worse. More bankruptcies may be coming because when one business fails, it can drag others down with it.

A tiny bit of good news?
Germany’s economy grew 0.2% early this year, but it’s not enough to fix the bigger problems.

Trade troubles with the U.S.
The U.S. is Germany’s biggest trading partner, but tensions are high. Earlier this year, the U.S. threatened new tariffs (taxes on imports)—including 20% on EU goods and 25% on cars and metals. Some were paused for talks, but the threat remains.

German exporters are nervous. A key confidence measure dropped to -7.4 points in June (from -5.0 in May), meaning more companies expect fewer sales abroad in the coming months.

Bottom line: Germany’s economy is still struggling, and businesses are feeling the pain. Without stronger growth or trade deals, the next six months could be just as tough.