After a disappointing trend reversal in September, the Swedish economy appears to have regained its footing ahead of the year's most important sales period. Fresh statistics from credit information company Creditsafe show that the total number of limited company bankruptcies in Sweden decreased by 15 percent during October. A total of 829 companies went bankrupt, compared to 975 during the same month last year.
Looking specifically at e-commerce, however, October was a somewhat more turbulent month in isolation, with bankruptcies increasing by 20 percent, albeit from low levels. Within the broader retail sector, the bankruptcy rate remained flat with a change of zero percent during the month, while wholesale trade bucked the trend and increased by 36 percent.
Strong Decline Year-to-Date
But those who look beyond the single month of October and examine the overall picture get a significantly brighter view of the situation in the industry. Earlier in the autumn, figures showed how pressure on e-commerce began to ease, and the positive long-term trend remains strong when the first ten months of the year are summed up.
Between January and October, the number of e-commerce bankruptcies totaled 182, a substantial decrease of 16 percent compared to the 216 online stores that failed during the same period last year. Retail as a whole also shows a stable recovery over time with 746 bankruptcies so far this year, a decrease of 14 percent compared to last year's 864 affected trading companies.
Henrik Jacobsson, CEO of Creditsafe, now sees clear signs of a more sustainable turnaround in the business community ahead of this year's closing high season.
After last month's increase, it is pleasing to see that bankruptcies are decreasing again. We have seen a positive development in eight of the ten months of the year, and the decline covers several of the industries that have had the toughest time. Although levels are still high, the development gives reason for cautious optimism ahead of the year-end.
Fewer Large Employers Fail
One of the most significant bright spots in October's figures is that fewer large companies are being forced to throw in the towel. In October, the number of employees affected by a bankruptcy decreased by a full 40 percent compared to the same month last year. Year-to-date, 17,622 employees have been affected, a sharp decrease from the 29,154 people who lost their jobs as a result of bankruptcies during the same period last year.
According to Henrik Jacobsson, the absence of large corporate failures is the single most important factor in this autumn's statistics.
Perhaps the most positive thing is that we are seeing fewer large employers among the bankrupt companies, unlike September when the development was the opposite. This means that fewer people are affected and the impact on the labor market is less.
Geographically, however, the recovery is unevenly distributed across the country. While the growth engine of Stockholm acts as a locomotive with a bankruptcy decrease of 24 percent in October and 13 percent year-to-date, Skåne is having a much harder time. In the southern region, bankruptcies instead increased by 25 percent during October and are now up 1 percent year-to-date.