THE NUMBER of bankruptcies surged last month to a 25-year high for the month of July.
Statistics Finland on Monday published data revealing that a total of 224 bankruptcy proceedings were initiated in July, representing an increase of 76 – or 51 per cent – from July 2022. The subjects of the proceedings contributed altogether 858 person-years to the economy, an increase of 338 person-years from last year.
Almost 200 of the companies that filed for bankruptcy were listed companies, 18 were natural persons and 4 were general or limited partnerships. Another five bankruptcy proceedings were initiated for housing companies, co-operatives and non-profit organisations.
Juhana Brotherus, the chief economist at Suomen Yrittäjät, highlighted that the bankruptcy situation has not been as bleak since 1997.
“The struggles of enterprises are indicative of a prolonged weak economic situation. The high numbers are no longer attributable simply to [financial] support during the coronavirus pandemic, which did create a pile-up of bankruptcies,” he estimated in his snap analysis.
Between January and July, altogether 1,864 bankruptcy proceedings were initiated, signalling a new high for the first six months of the year in a decade. Although the number of filings peaked early in the year, it has remained clearly at a higher-than-usual level, said Brotherus.
He predicted that the dubious landmark of 3,000 bankruptcies will be surpassed this year for the first time since 2013.
“In terms of bankruptcies, the remainder of the year is associated with concern especially in the construction sector, where residential and renovation construction are struggling because of costs and interest rates.”
Statistics Finland said the number of bankruptcy filings last month was the highest in the construction sector and other service sectors, 61 and 68, respectively. The number of filings in the commerce sector stood at 26 and that in the restaurant and accommodation sector at 24.
In the agriculture, forestry and fishery sector, by contrast, only six bankruptcy proceedings were initiated.
Aleksi Teivainen – HT