Builders drive Swedish bankruptcies to the highest level in decades

THE number of Swedish companies going out of business reached the highest level since at least 1999, with several large builders going bankrupt as construction of new homes is screeching to a halt. 

As the Swedish economy is showing signs of buckling under the pressure of elevated inflation and rising interest rates, bankruptcies increased by 38 per cent in August, according to a monthly release from Creditsafe.

The credit reference agency registered 5,000 company defaults in the first eight months of this year, up 37 per cent from 2022 and the highest since it started collecting data. 

“The worrying trend of increased bankruptcies is continuing with no signs of abating,” Henrik Jacobsson, regional manager of Creditsafe Scandinavia, said in a statement on Friday (Sep 1). “Even if the year-ago figures are now getting higher, we expect the situation to remain tough.”

A rapid slowdown in the construction of new homes is set to weigh on the Swedish economy, compounding the hit from declining consumer spending.

Data published Friday showed that a record number of Swedes are cancelling plans to buy new-build apartments, and Creditsafe’s statistics showed that eight of the ten largest bankruptcies in August happened in the construction industry.  BLOOMBERG