More Swedish companies going bust
TT/The Local · 6 Nov 2008, 08:46
Published: 06 Nov 2008 08:46 GMT+01:00
In October, the number of companies in Stockholm County shot up 53 percent compared to the same month last year.
Overall, Sweden has seen a 7 percent increase in bankruptcies for the year thus far, according to the credit information company UC.
And the full force of the economic slowdown appears to have hit Stockholm County hard.
“October literally constituted a bankruptcy explosion in Stockholm County,” said Roland Sigbladh, UC’s head of marketing, in a statement.
Most bankruptcies occur among private service, construction, and retail companies, as well as within the hospitality industry.
“In Stockholm there it’s a lot of consulting companies, restaurants, and construction firms. And it’s primarily these three sectors which are increasing right now,” said Sigbladh.
UC estimates that bankruptcies will increase around 20 percent nationwide in November and December, which would constitute an annual increase of 10 percent compared with 2007.
And according to UC, there are few signs that 2009 will be any better. The companies that have already failed have had long-standing problems, according to Sigbladh, and the real effects of the financial crisis and the weak economy will only become apparent in the new year.
“During the spring of 2009 things will probably really explode. This is only the beginning,” he said.
Despite the rise, however, Sigbladh emphasized that the number of bankruptcies remains is nothing to be alarmed about when viewed in a historical perspective.
“We’ve had a pretty low number of bankruptcies in recent years,” he said.
Also worrying, however, is the increasing number of bankruptcies in Sweden’s important export markets as firms find it hard to finance their operations, resulting in liquidity shortages and payment problems, according to the credit insurance company Euler Hermes.
“The official statistics show a clear change in trends in Great Britain and Germany,” said Alexis Spanos, the head of Euler Hermes in Sweden, in a statement.
In France and Spain, the increase in bankruptcies has accelerated noticeably, especially in Spain.
In the United States, the numbers paint a similarly dismal picture with a sharp rise in the number of bankruptcies.