Norway perilously close to bankruptcy record
The latest bankruptcy report from the data and analysis company Bisnode shows strong growth in bankruptcies and foreclosures in Norway. 3559 companies have gone bankrupt or foreclosed in the first half of the year, an increase of 9.8 per cent compared to the same period last year. “If we look at the last twelve months we are perilously close to the bankruptcy record from 2009”, says Credit Economist in Bisnode, Per Einar Ruud.
Opposed to a 40 per cent decline in foreclosures in May, Norway experienced a growth of 70.9 per cent in June. This year we have witnessed 32.4 per cent more bankruptcies and foreclosures than Norway experienced in June 2017.
– After a decline in May, we are back on a relatively high growth rate in June. In The first half of 2018 the increase is at almost ten per cent compared to the first six months last year, and that’s a lot, says Per Einar Ruud.
Bankruptcy record looming
In April, a bankruptcy record was predicted with numbers exceeding what we experienced during the financial crisis. In May, the development slowed down, but the economists thought it was too early to comment on how the numbers would fluctuate. They were obviously right in their assessment. The June figures show that we can still be headed toward a bankruptcy record.
– It is common that the bankruptcy figures vary from month to month, and especially in the case of foreclosures. We must look at the overall picture to form a proper impression. Over the last twelve months, 6,437 companies have belly-flopped in Norway, that is not far off from the record of 6,449 dating back to 2009, says Ruud.
Service Industry nearing the bankruptcy peak
Although the construction industry is still on the bankruptcy peak, there has been a moderate growth of 2.3 per cent compared to the first half of last year. This industry still accounts for more than one quarter of all bankruptcies. The Service Industry, which is the second largest industry with regard to bankruptcies, has on the other hand seen the largest increase so far this year an amazing 18.2 per cent.
– If this trend continues, the Service Industry may soon be the most vulnerable, Per Einar Ruud in Bisnode emphasizes.
Ruud warns the business community that they must pay close attention to the situation.
– Bankruptcy in one company can cause major problems for other companies, it is therefore important to take good care of the ones you trade with, Ruud warns.
© Bisnode / #Norway Today