The Ifo says the number of companies who “fear acutely for their economic survival” also rose from 6.8% to 7.3% in October as cashflow was hit amidst a slump in orders.
Klaus Wohlrabe, head of surveys at Ifo, said: “The steady increase in corporate insolvencies is likely to continue.
“In addition to the lack of orders, growing international competitive pressure is upsetting many companies so much that they see their future acutely at risk. Growing bureaucratic requirements are adding to the cost pressure.”
Ifo figures show that German automotive sales have fallen at their fastest rate since the Covid-19 pandemic, with a new EU stance on Chinese tariffs set to put even further pressure on the industry.
Last month, the EU voted in favour of imposing tariffs on Chinese electric vehicles, despite Germany lobbying for the motion to be rejected over fears it could lead to a trade war.
Prior to the vote, the powerful German auto workers union IG Metall said: “We say unequivocally: tariffs are the wrong approach because they will not improve the competitiveness of the European automotive industry.”
Similarly, German car manufacturer Volkswagen today warned that the EU was taking “the wrong approach” and urged further talks with Beijing.
The potential imposing of tariffs by the new Donald Trump administration has also contributed to the uncertain economic climate.
The president-elect campaigned on a pledge of imposing blanket tariffs of as much as 20% on goods imports.
He has also threatened tariffs of up to 60% on Chinese imports, a measure economists have warned would devastate global trade and drive up inflation.
