Decrease in Business Bankruptcies and Increase in Startups in June 2023
June 2023 sees a drop in bankruptcies and a rise in new startups in Sweden, indicating mixed economic signals.
Key Points
- • A 5% reduction in business bankruptcies in June compared to last year.
- • New business startups increased by 5% during the same period.
- • Construction and wholesale sectors reported significant decreases in bankruptcies of 24% and 18%.
- • Challenges remain with high unemployment and cautious investment in the economy.
In June 2023, a marked decline in business bankruptcies and a simultaneous rise in startups were reported in Sweden, offering a glimpse into the economic landscape. According to the business and credit information company UC, the number of bankruptcies decreased by 5% compared to the same month the previous year, continuing a downward trend observed for three consecutive months. In contrast, the number of newly established companies also rose by 5% during this period.
Sector-specific developments revealed a substantial drop in bankruptcies within the construction and wholesale sectors, with reductions of 24% and 18%, respectively. However, the hospitality and retail sectors experienced slight increases of 1% and 5% in bankruptcies. Despite these improvements, Amanda Aldestam, an analyst at UC, cautioned that the Swedish economy is currently facing challenges such as recession, high unemployment, and cautious investment behaviors, which have tempered initial optimism about recovery.
The recent decision by the Riksbank to lower interest rates could enhance household purchasing power in the near future, which may further influence the nascent recovery. However, ongoing trade tensions and import tariffs significantly affect demand and planning conditions, with negotiations between the EU and the US regarding tariffs becoming increasingly crucial, particularly with a tariff hold lasting until July 9.