In Finland, bankruptcies reached 25 years, the construction industry is the biggest victim of the year

"Although the number of companies that went bankrupt in the last year is the highest in 25 years, it is still clearly below the bankruptcy figures of the 1990s recession," he reminded.

For example, in 1992, the courts declared a total of 7,391 companies bankrupt.

Compared to the financial crisis, the number of bankruptcies has been high in agriculture, fishing, forestry and services, unchanged in construction and little in industry.

The numbers are also grim from last month, the number of bankruptcies rose from the previous year by 112 to 345, i.e. the same level as in March 2014. The last time the monthly number of bankruptcies was higher was in October 1997.

The construction industry has been worrying for much of the year.

Statistics Finland on Tuesday reported that in August-October, the number of cubic meters of permits for new construction projects fell by 36 percent year-on-year to six million cubic meters. The number of permitted dwellings fell by 45 percent in three months to 4,462, while the cubic volume of completed residential buildings fell by six percent.

There were also signs of recovery. The number of licensed cubic meters of new commercial and office buildings increased by 79 percent from a year ago.

However, housing construction is still in the doldrums, he sums up Juho KeskinenEconomist at the Finnish Mortgage Association (Hypo).

"The gloomy figures for new construction are getting darker and darker and bankruptcies in the construction industry are increasing by an estimated 200 and more than 1,000 person-years from last year," he stated. press release.

Keskinen pointed out that confidence in the construction industry has fallen to its lowest level since the financial crisis and the number of building permits to its lowest level since the 1990s. On the other hand, the market's expectations that interest rates will start to fall has made it possible to recover the share value of listed construction companies, and there have been signs of recovery in real estate transactions.

However, he does not expect the market to change significantly in 2024.

"However, next year will be historically bad for construction sites, which will be most clearly seen in the number of new houses in 2025," he said.

The Finnish construction industry experienced its biggest bankruptcy of the year this week, According to Helsingin Sanomat. On Monday, the District Court of Eastern Uusimaa declared bankruptcy of most of the Sajucon Asset Management group from Vantaa, which specializes in timeless and practical small houses.

The group's operating profit in 2022 was 1.3 million euros with a turnover of 115 million euros, the result meant a decrease of more than 13 million euros and an increase in turnover of 14 million euros from the previous year.

Sajucon Rakennus, whose share of the group's turnover in 2022 was 7.3 million euros, will remain part of the group, which will continue to operate.

- At the time of filing the bankruptcy petition, two projects were in progress. Two projects […] there were a total of seven apartments, four of which are scheduled to be completed in December 2023," the company says on its website.

"The financial situation of the companies deteriorated rapidly during the autumn, and profitability and solvency did not improve effectively enough despite significant adaptation measures. Under the prevailing conditions, companies drifted into insolvency, which proved to be irreparable. Declaring bankruptcy was the only option to prevent more debt."

Aleksi Teivainen – HT


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