The construction industry in Germany continues to struggle with rising insolvencies due to high interest rates and construction costs. Gussek Haus, a prefabricated house builder, is the latest company to file for bankruptcy.
Gussek Haus files for insolvency but continues operations
Gussek Haus, a well-known prefabricated house manufacturer based in Nordhorn, Lower Saxony, has filed for insolvency. According to reports from NDR and the Neue Osnabrücker Zeitung, the company, which employs 346 people at its Nordhorn headquarters and another 47 in Saxony-Anhalt, will continue its operations under the supervision of insolvency administrators Stefan Meyer and Christian Kaufmann. Ongoing construction projects are expected to proceed without disruption.
Founded in 1951, Gussek Haus has built up to 300 prefabricated homes annually, not only in Germany but also in Switzerland and the Benelux countries (Belgium, the Netherlands, Luxembourg). The company has been under the leadership of Frank Gussek, a member of the founding family, since 2009.
Insolvency surge in the construction sector
The wave of bankruptcies hitting the German construction industry is not unique to Gussek Haus. The consultancy firm Falkensteg reported that while the number of large insolvencies slightly decreased in the second quarter of the year, they remain at a concerningly high level. Jonas Eckhardt, a study author and partner at Falkensteg, warns that the overall economic situation suggests a further increase in insolvencies is likely. Contributing factors include ongoing economic weakness, high interest rates on business loans, and increasing payment difficulties among customers.
In the second quarter, the most affected sectors were automotive suppliers with six insolvency filings, followed by retail, fashion companies, and the construction industry, each with five filings.
More bankruptcies expected in the second half of the year
Experts predict a surge in insolvencies during the second half of the year. “The second half of the year traditionally sees a rise in bankruptcy cases,” says restructuring expert Jonas Eckhardt. Jürgen Matthes, head of international economic policy at the Cologne Institute for Economic Research (IW), describes the current business sentiment as the worst in years.
Matthes attributes the difficult environment to a combination of higher energy and consumer prices, a global demand slump, and national issues such as high labor costs, excessive bureaucracy, and heavy tax burdens. International risk factors also play a role, including unreliable supply chains from autocratic countries, the potential for conflict in Taiwan, and the possibility of Donald Trump returning to the White House, which could significantly impact German exporters.
