The pandemic has had a huge impact on the world economic situation, as well as the Nordic countries. Enento Group, with local brands Asiakastieto och UC, and in partnership with Experian, have summarized the bankruptcies during the months of March, April and May, and analyzed how the different countries approach to the Covid-19 pandemic has affected the local business climate.
Enento Group and Experian have summarized the bankruptcies in Denmark, Finland, Norway and Sweden during the key months impacted by the Covid-19 pandemic, March, April and May 2020, and compared the data with the same time period in 2019.
The data shows that the largest increase of bankruptcies during the time period was in Finland in April with a 36 percent increase of bankruptcies, compared to April 2019. The bankruptcies in Sweden follows the trend with an increase of 30 percent in April compared to April 2019. Bankruptcies in both Denmark and Norway are decreasing during the three months the data is gathered, and there is a good explanation for this.
The monthly amount of bankruptcies has been increasing in Finland since January and the development strengthened a bit in March and April. In Sweden, the bankruptcies are also increasing, but not as much as you might have expected and there are clear signs of stabilization over the upcoming months.
– During the Covid-19 pandemic the Finnish government has provided economic aid for companies and made some temporary adaptations to the debt collection legislation. Finland did make some strict governmental lockdown operations, which of course also have had an impact. The main business segment in Sweden that has been struggling the most is the Hotel- and restaurant sector where we still expect a high number of bankruptcies going forward. The industry has a low profitability and many companies struggled with a reduce of revenues by 80 percent in late March and in April. Many are still struggling, and we will encounter a huge recession later on, even more companies in this industry will follow, says Jukka Ruuska, CEO of Enento Group, where the local brands Asiakastieto in Finland and UC in Sweden is part of.
For Norway and Denmark there has been less bankruptcies during these three months, which is due to several factors. The Government in both countries have issued help packages to many companies, supporting them in times of crisis and thus avoiding bankruptcy, for the time being
In Denmark, the Public Courts were also affected by the shutdown of society, and there has been a slowdown in the handling of the bankruptcies, which is expected to slowly get back to normal from June onwards. The ketchup effect of the bankruptcies has yet to show itself but is expected to come once the aid packages are phased out. But the Government in Denmark is very conscious of this and are looking into how they can further support the companies at risk.
When comparing with the same time period for last year for Denmark, there was a spike in bankruptcies in 2019, due to the legal form called IVS (1 kr value to establish as a company) was out phased, and all remaining active IVS companies will be closed mid-April next year.
Surprisingly an industry where there was an expectancy of an increase of bankruptcies, Hotel- and restaurant sector, there was a decrease, which can be due to the help packages provided by the Danish Government.
Many of the same trends that we see in Denmark also appear in Norway. Support schemes from the Government have mitigated the negative effects in the short term. Perhaps more importantly, the reduced operation in Public Courts and the Tax Authorities reluctancy to submit bankruptcies has heavily influenced the numbers, resulting in a downward trend. Even though overall numbers are down, we can already see that Hotel- and restaurant sector are struggling. Based on the factors mentioned above, we have a firm belief that the financial situation for many companies are worse than what the bankruptcy numbers show in recent months.
Variations in the impact on local industry segment
There are differences on how the pandemic has affected different local industry segments. The segment Hotel- and restaurant sector was affected hard in Sweden during the initial months and the number of bankruptcies within the segment were doubled during both March (121%) and April (135%) competed to last year. In Norway, there was a similar trend and the number of bankruptcies within the segment has increased heavily during May 2020 (120%), compared to May in 2019.
In Finland, the bankruptcies in the segment increased in March and April but decreased in May. In Denmark, the bankruptcies in the segment has decreased during the entire measurement period.
– It is quite interesting to see how the Nordic governments approach to handling the Covid-19 has had a clear impact on bankruptcies. We expect in the near future that some industries will be hit harder than others, but I think this demonstrates that the Government stimuli has had a positive effect in the short term and hopefully also longer term. Bankruptcies may provide room for new, innovative companies in the market, which is overall good for the Nordic economies and competition in the longer term. We are dependent on strong companies with healthy businessmodels” comments Frode Berg, Managing Director Nordics at Experian.
About the data:
The data presented in this press release is stating bankruptcies in Denmark, Norway, Finland and Sweden during the period of March, April and May in 2020, compared with the same period in 2019. Public administration and defense has been excluded.
For questions to the data per local market, please contact:
Norway and Denmark: Rie Lindgren, Experian Nordic Marketing Manager, +45 60 43 41 44 and email: Rie.email@example.com
Sweden: Johanna Westin, Nordic PR- and Communications Manager, +46 76 525 01 16 and email: Johanna.firstname.lastname@example.org
Finland: Ville Kauppi, Content Manager Finland, +358405148183 and email: Ville.email@example.com