Finland experienced a significant surge in business bankruptcies in 2023, with a total of 2,700 companies going under – marking a 26% increase from the previous year. This rise represents the highest number of bankruptcies in the Finnish business sector since the 2009 financial crisis, when just over 2,200 companies were declared bankrupt.
Jaakko Nors, a product owner specializing in bankruptcies at Asiakastieto, draws a stark comparison to the past,
"The jump of nearly 500 bankruptcies compared to the previous record during the financial crisis is a clear indication of an exceptionally challenging year for the Finnish economy."
The combined turnover of these bankrupt companies approached 2 billion euros, impacting over 8,000 employees. According to Nors, these changes bear significant national economic consequences, especially as there hasn't been a commensurate rise in growth companies or large employers to offset the losses, such as reduced tax revenues.
A notable trend in 2023 was the bankruptcy of larger firms in Finland, which typically has a landscape dominated by small businesses. Data from Asiakastieto shows that 299 companies with a last reported turnover of at least one million euros were declared bankrupt, a significant increase from the 190 similar cases in 2022. "Most of these major bankruptcies were in the construction sector, struggling to adjust to rising costs and decreasing demand. In other sectors, bankruptcies of companies with turnovers exceeding ten million euros are still very rare," explains Nors.
In addition to bankruptcies, other corporate payment defaults also saw a marked increase last year. Asiakastieto Oy registered around 224,000 payment default entries, with the total number of companies with payment defaults reaching 44,300, a 13% increase from the previous year.
Nors highlights a concerning trend where companies delay seeking restructuring until it's too late. He suggests that a closer dialogue between debtors and creditors could more effectively resolve issues. Reflecting on the lessons from last year, Nors hopes that businesses will closely monitor their customers' and supply chain partners' financial health to avoid being blindsided by their financial difficulties, thereby securing their own future.