Aerial view of construction site of residential buildings in Turku, Finland
15.6.2023 15:20

Liquidation applications jump 44% year-on-year

This April, a total of 248 companies applied for liquidation, also known as bankruptcy.

Fresh figures from Statistics Finland show that the number of liquidations has increased significantly on last year.

Statistics Finland says that 248 applications for liquidation were made in April, 76 applications more than the same month last year.

On the basis of the statistics, the companies applying for liquidation employed 821 full-time equivalents (FTEs). That is 126 FTEs more than April 2022.

Most liquidations in construction

In the economically sensitive construction sector, the number of liquidations has seen a particular increase. Statistics Finland says that 63 liquidations were reported in the construction sector in April. At the same time, the fewest liquidation applications were made in the agriculture, forestry and fishery sector, with just seven in total.

Petri Malinen, an economist at Suomen Yrittäjät, the Finnish SME association, says that many consecutive crises and uncertain future outlooks are reflected in the increased number of liquidations.

“The prevailing situation is particularly challenging for the construction sector. At the same time as inflation erodes purchasing power and interest rates have risen sharply, it’s no surprise that consumers have significantly less ability and desire to buy new homes. When you combine this with the reduced demand for offices brought about by increased remote work, the figures from the construction sector are not a complete surprise,” Malinen says. 

Malinen considers a continuation of the construction sector’s challenges for some time likely.

“After that, the gradual easing of inflation and normalization of interest rates will probably restart the housing market. In addition, renovations to existing stock ease the longer-term outlook. That’s spurred both by our refurbishment backlog and higher energy prices.”

Edit to original Finnish text on 25 May 2023 at 16.30: Headline corrected to refer to applications for liquidations, not liquidations themselves.

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Pauli Reinikainen