Surge in Auctions as Companies Struggle with High Energy Prices and Bureaucracy

High energy prices, bureaucracy and a shortage of skilled workers are causing problems for many companies. Auction houses are also noticing this: A particularly large number of companies are currently coming to auctioneer Philippi in Moschheim who are giving up.

“Everything looks good. It can start,” says Jürgen Philippi. Early in the morning he is out and about again inspecting the spacious courtyard of his farm. There are excavators, cars, trucks and lots of different construction equipment such as rammers, ramps or pallet trucks. Philippi is an auctioneer in Moschheim, Rhineland-Palatinate. There is an auction today. Many goods from bankruptcies go under the hammer.

“Today we have almost 700 objects. That’s a lot. Normally we have around 500. I estimate the total value at around 600,000 euros,” explains the 57-year-old. “The economic crisis is really hitting me here now. More and more companies are having to give up. Others no longer want to continue. Just yesterday a customer said to me: ‘Please auction my business. I can’t get the money back, the costs are closed high, and I also miss employees.'”

Philippi also runs a pawn shop. More and more people are coming here because they can no longer finance their everyday lives. “A few days ago a gentleman was there. He needed 200 euros for fuel to get to work. That didn’t exist before,” explains Philippi with a worried look.

Paintings, carpets – and a ship

Other valuables are stored in a hall: paintings, carpets, clocks and even bicycles. “These things do not come from bankruptcies or business expenses. They are mostly estates where the relatives refuse the inheritance or cannot be identified. At the end of the day we auction everything that can be done. But the quality has to be right. We already have a Rhine ship auctioned,” says the auctioneer and laughs.

Two hours before the auction, the first interested parties come to the auction house’s courtyard. They are mainly entrepreneurs from the construction industry – like Stefan Papistella. He arrived from Bamberg in the morning. Papistella is a regular customer at Philippi. “I also buy new goods, but there are too many electronics in the new machines. They break down too often. That’s why I look here for good, used things. They often run for decades without a problem,” he explains.

“Everyone has become cautious”

Papistella looks across the yard and at the other interested parties. About 250 customers are now there. “In the spring there were many more. Everyone has become cautious. Anyone who has to sell now has a very bad hand. The economy is slipping.”

The nationwide trend confirms the observations made by entrepreneurs Papistella and Philippi. In Germany, the number of company bankruptcies is increasing. According to the Federal Statistical Office, 13.9 percent more companies filed for standard insolvency proceedings in June than in the same month last year. The number has been steadily increasing since August last year.

According to experts, there are also catch-up effects. State aid and the obligation to file for insolvency, which was suspended due to Corona, have resulted in very few company bankruptcies in recent years. Now the repayments of the state aid money are due, which is causing some companies difficulties.

Companies are under pressure

At the same time, the German economy is in recession. The gross domestic product has recently shrunk twice in a row. The prospects are poor: Leading institutes expect economic output to fall for the year as a whole. In addition, interest rates have risen, which is further paralyzing a recovery. The European Central Bank (ECB) wants to fight inflation in this way. In addition, inflation has picked up again recently. In June, consumer prices rose to 6.4 percent.

Companies are also increasingly struggling with this. “The enormous cost burdens caused by excessive energy and material prices are having an effect. After years of declining insolvency figures, the trend has reversed,” explains the head of Creditreform economic research, Patrik-Ludwig Hantzsch.

Tough auction

The auction at auctioneer Philippi has started in Moschheim. There are no bids for many art objects such as paintings or carpets. After an hour and a half there is a break. Philippi can take a deep breath and draw a first interim balance. “We notice it clearly: There are fewer customers and they are very cautious with their money. We knew that it would be less, but that’s the way it is, that’s surprising to us.”

Then it goes on. Overall, the auction is running rather slowly. Some mini excavators do not find a new owner. Philipp is hoping to sell them in the coming days. The auction ended after three and a half hours and 674 lots. Overall, the auctioneer is satisfied with the overall result. Most of the large parts are auctioned off.

“We expect bad times”

Nevertheless, Philippi is thoughtful: “The wheel bearings or the excavators that we auctioned off today would have been ripped out of our hands six months ago. This reluctance shows what’s going on in many companies out there. We expect bad times.”

Philippi has his next auction date in early September in Hamburg. Then he wants to auction high-quality kitchen studios. “It used to be a sure thing. But now? Our industry has always been a seismograph for the state of the economy. I’m very concerned.”