(Bloomberg) -- The number of bankruptcies in Sweden declined on year last month, for the first time since July 2022, according to data from credit reference agency Creditsafe.
The 3% drop in defaults in August comes as falling borrowing costs have helped fuel optimism about an economic recovery in the Nordic region’s largest country. The outlook has brightened after the central bank indicated it will continue to lower rates and as the Swedish government is preparing a 2025 budget that aims to stimulate growth and provide relief to households that have been battered by higher prices and mortgage rates.
“Following two years of increasing bankruptcies, we now see a month with a slowdown, which is very pleasing,” Henrik Jacobsson, chief executive officer of Creditsafe in Sweden, said in a statement. The company registered 500 bankruptcies in August, including Mackmyra Svensk Whisky AB, a 25-year-old whiskey maker that had been listed since late 2011.
The number of defaults continued increasing among commercial property companies that have been hit hard by borrowing costs that were recently at their highest in more than 15 years. While prominent landlords that have become examples of the real estate turbulence, such as Samhallsbyggnadsbolaget i Norden AB and Oscar Properties AB, have been able to muddle through, total bankruptcies in the sector have increased by 77% so far this year, compared with a year ago.
Also on Monday, a purchasing managers’ index from Swedbank/Silf showed a larger-than-expected rebound from a weak outcome in July. However, Jorgen Kennemar, who is responsible for analyzing the data at Swedbank AB, said the indicator of sentiment in the Swedish manufacturing sector is typically volatile in the summer months, and noted that the index remains below a May reading.
“In the last three months, the index has been virtually unchanged, following an increase in spring,” he said. “The recovery in Sweden’s manufacturing industry has lost steam at the same time as global growth prospects have deteriorated.”
--With assistance from Joel Rinneby.
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