Bankruptcies down amid virus crisis, but more employees affected
From January to August, the number of bankruptcies increased in the industry of mining and raw materials but decreased in the rest of the main economic sectors.
Despite being a difficult year for business due to the crisis derived from the coronavirus pandemic, so far in 2020 there have been fewer company bankruptcies.
According to the latest figures released by Statistics Finland, between January and August there were 1,591 company bankruptcies, which was 149 fewer bankruptcies (or 8.6% less) than in the same period last year, when no external agent like the Covid-19 virus shook the economy.
Although fewer companies have declared bankruptcy, the number of workers affected by these exceptional measures is higher than a year ago. The companies that filed for bankruptcy in the first eight months of the year have 8,598 employees, which represents 396 people (4.8%) more than in the same period of the previous year.
Bankruptcies increased in the main industry of mining and raw materials. In this sector 153 companies filed for bankruptcy, which is 4 more (2.7%) year-on-year. In the rest of the main economic sectors, bankruptcies decreased.
Source: Statistics Finland.
The greatest reduction
In figures, the greatest reduction in the number of bankruptcies occurred in the construction sector. According to Statistics Finland, there were 307 bankruptcies, 55 (or 15.2%) less than a year earlier.
Initiating a bankruptcy does not always mean that a company or professional is "going bankrupt" in the strict sense of the term. Bankruptcy is a complex and multi-stage legal process in which the proceedings may be interrupted and businesses can be saved, for example after restructuring their debt.