Bankruptcies increasing in Sweden once again

Tuesday, 07 August 2012
After a spat of good economic news from the Swedish macro economic scene last week with a GDP growth of 2.3 percent, it turns out that the micro sector is not doing well. The number of business bankruptcies are growing and latest data point to some 472 companies which went bust only in July, representing an increase of 15 percent compared to 2011.

In a press release from the business and credit information company, UC, for the period January to July, the number of corporate defaults went up to 3884 items, 9 percent more than during the corresponding period of 2011.

According to the UK, the big bankruptcy rise in July was not entirely unexpected. Although the Swedish economy proved more resilient than most people believed, the effect on businesses on the weak economy was evidence. This has been mostly explained by the European debt crisis and the uncertain situation that had been created thereafter.

Another factor explored by UC is the weak consumer spending and low interest in business investment which means lower demand for goods and services. Moreover, it affects the export industry because of the strong exchange rate due to the strength of the Swedish Krona.

More failures were identified in the retail trade area and among the private service companies especially in July.

Geographically more failures were counted in Western Götaland which registered one of the largest monthly increases, and as elsewhere in the empire was the retail sector, which mainly drove bankruptcy upswing.

UC says there will likely be a continued high level of bankruptcies to continue in a few months, regardless of the outcome in Europe. "Given the many uncertainties, we adjust our forecast slightly up and now considers that bankruptcy will increase by 5 percent in 2012, "writes UC.
by Scancomark.se Team