Swedish Bankruptcies Soar as Housing Crunch Hits Builders

The number of Swedish bankruptcies soared to the highest level in at least a decade in January, as construction companies come under pressure from an ongoing housing-market rout, Bloomberg News reported. The number of companies filing for bankruptcy increased by 47% from a year earlier in January, to 622, according to credit reference agency UC. The data highlights the effects of Sweden’s worst housing-price slump in three decades, which has contributed to a surge in defaults in the construction sector, with 130 builders filing for bankruptcy last month. “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.” The Swedish housing market has become emblematic of a development that is playing out across the world as interest rates rise and households are pressured by increasing costs. Home prices have dropped by 16% from a peak in the first quarter of last year and economists expect the slide to continue, erasing outsized gains during the Covid-19 pandemic. Read more.