Bankruptcy, credit risks and a second-hand market in the wind - this is what UC showed on "Insolvencies in Focus"

Using recent figures and long trend curves, UC showed how both the corporate and consumer markets have developed in recent years, and what lies ahead.

Clear dip among consumers – but brightening on the business front

According to UC's indicators, Swedish households remain very pessimistic about their economy, both looking back and forward. That said, the business community shows a more neutral view, and some industries, such as the motor vehicle trade, have increased confidence in the future compared to before.

– It's not as bad as it might sound. There are positive signals, especially in how the industry views upcoming sales volumes, said Fredrik Bonorden, Head of analytics at UC.

More bankruptcies – but in a larger corporate landscape

In 2024, the number of bankruptcies reached over 10,000, which is historically high. However, UC emphasized that the number of limited companies in Sweden has increased significantly over the past decade. If calculated in proportion, bankruptcies have not increased as dramatically as it might seem.

At the same time, there are clear patterns in which companies are affected, with younger companies clearly overrepresented. Many of them have also been granted tax deferrals during the pandemic, which still affects the bankruptcy picture.

Fraud patterns behind up to half of bankruptcies

A particularly important point UC highlighted was that up to 50 percent of bankruptcies today show fraudulent patterns, for example through frequent board changes shortly before bankruptcy. Using its own models, UC tries to identify companies with a higher risk of payment problems, but also a lack of willingness to pay.

“It's not just the ability to pay that counts. We also need to be able to assess the willingness to pay,” emphasized Petter Alvsten, Head of Consumer Insight at UC.

The used market can benefit from the new situation

A recession affects consumers' willingness and ability to buy capital goods like cars. Many households are pressured by high interest rates and reduced purchasing power, which reduces demand for new vehicles. But according to UC, the economic situation may instead drive more buyers towards the used market, where prices are lower and supply is large.

During the presentation, it was mentioned that households' confidence in the future remains low, and that more people are prioritizing security and cost control. This in turn may strengthen interest in buying used, especially from players who offer safe and transparent transactions.

“We have been incredibly pressed when it comes to buying expensive capital goods. This could benefit the used market,” Petter Alvsten concluded.

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