The number of Swedish bankruptcies reached the highest level in at least a decade in January, as defaults in the construction industry rose in the wake of an ongoing housing market rout.
(Bloomberg) — The number of Swedish bankruptcies reached the highest level in at least a decade in January, as defaults in the construction industry rose in the wake of an ongoing housing market rout.
The number of bankruptcies increased by 47% from a year earlier in January, according to credit reference agency UC, which said the transport sector and construction companies were hardest hit last month.
The data comes as Sweden is experiencing its worst housing-price slump in three decades, which is expected to lead to a dramatic drop in investment in new home construction. The development is set to weigh on economic activity, which is expected to continue dropping this year after a contraction in the fourth quarter of last year.
“During fall, we saw bankruptcies in consumer-facing businesses such as retail, hotels and restaurants,” UC economist Johanna Blome said in a statement. “Now we see that the largest increase is happening in sectors that are closely connected to industry and longer-term investments.”
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