Swedish bankruptcies reach highest level in decade

The number of bankruptcies in Sweden has reached the highest level in a decade, according to statistics released here on Friday, reported Xinhua.

Nearly 5,500 businesses went bankrupt between January and August, an increase of 35 percent year-on-year, the business and credit reference agency UC said in a press release.

Bankruptcies were recorded across all business sectors, with their number increasing by 49 percent among companies selling and servicing motor vehicles; by 40 percent in the transportation sector; and by 39 percent in the retail, hotel and restaurant sectors.

Building and construction was the sector with the highest number of bankruptcies -- just over 1,000, up 35 percent year-on-year, the UC said in the press release.

In August, the number of bankruptcies in the building and construction sector increased even more, by 48 percent year-on-year.

The slump in the building and construction sector came after Sweden's central bank Riksbank raised its key interest rate to 3.75 percent after keeping it at zero or sub-zero level for more than seven years, which had a cooling effect on the housing market.

There are, however, other factors behind the large number of bankruptcies in the building and construction sector, Johanna Blome, an economist at the UC, said.

The trend "indicates a deeper crisis, which is probably also fueled by the critical situation of the (weak) Swedish krona and that the foreign workforce on which the industry is so dependent now is opting out of working for Swedish companies," Blome said.

Sweden's economic woes are, however, worse than the bankruptcy statistics reveal, Blome said in the press release.

"The gloomy picture of entrepreneurship in Sweden is reinforced by the number of newly started businesses in several large industries, which is (also) the lowest in ten years," Blome said.