Bankruptcies in Finland reached their highest annual level in three decades in 2025, as 3,906 companies filed for bankruptcy, according to new data released by Statistics Finland (Tilastokeskus). The figures, published on 16 January 2026, point to a broad-based rise in insolvencies across the economy after three consecutive years of elevated filings, with the construction sector still accounting for the largest number of cases.
Bankruptcies in Finland by sector: construction and beyond
Statistics Finland said that 360 bankruptcy proceedings were initiated in December 2025, up 34% from the same month a year earlier. For the full year, filings rose by 12% compared with 2024, bringing the total to 3,906—the highest figure since 1996, when Finland was emerging from a deep domestic financial and economic crisis.
While construction recorded the largest number of bankruptcies in 2025 (768 cases), the statistical agency stressed that the recent wave is not limited to one industry. A senior statistician at Statistics Finland, Mira Kuussaari, said that “in practically all other sectors, the trend has been upward”, even as construction bankruptcies are no longer rising as sharply as they did at the start of the current upswing.
Why the employment impact points to small and medium-sized firms
The bankrupt companies in 2025 employed around 14,300 people, Statistics Finland said. That figure suggests that the current cycle is hitting small and medium-sized enterprises (SMEs) more than large employers: the number of bankruptcies has climbed, but the average number of employees affected per case remains relatively modest.
This pattern matters for the labour market. SMEs account for a significant share of Finnish employment, and a sustained increase in insolvencies can translate into local job losses, delayed investment and weaker confidence—especially in regions where small contractors and service providers depend on the same networks of clients.
What is driving the rise in bankruptcies
Finland’s bankruptcy numbers are moving in the same direction as several indicators of a difficult business environment.
One factor is the long after-effect of higher interest rates in the euro area, which increased financing costs for debt-heavy sectors such as construction and real estate and made it harder for smaller firms to refinance. Even as the European Central Bank has shifted away from peak tightening, credit conditions have remained stricter than in the 2010s for many small companies.
Finland has also faced a prolonged period of weak growth. The Bank of Finland has pointed to sluggish demand, fragile investment and a broader rise in bankruptcies in sectors including construction, real estate, accommodation and food services. Export-oriented businesses have been exposed to softer demand in parts of Europe, including Germany, while the loss of trade with Russia since the start of the war in Ukraine has reshaped supply chains and markets for some firms.
The construction sector, meanwhile, has struggled with falling turnover and subdued building activity. Even if construction bankruptcies peaked earlier in the cycle, the sector’s weight in total filings remains high, reflecting the depth of the housing and building slowdown.
How Finland compares with other Nordic countries
The rise in bankruptcies is not unique to Finland. Across the Nordics, insolvency numbers have increased in recent years, although the sector mix differs by country and the legal definition of filings can vary.
Sweden has also reported a rise in bankruptcies, with construction, retail and smaller limited companies often highlighted in national statistics and industry reporting. Norway has experienced a notable share of bankruptcies in construction in recent years as well.
What stands out in Finland’s case is that the country’s total number of filings in 2025 pushed past a 30-year threshold, bringing the discussion back to the mid-1990s benchmark that still resonates in Finland’s economic memory.
What to watch in 2026
Looking ahead, two variables will shape whether bankruptcies in Finland continue to climb or start to stabilise.
First is the pace of recovery in construction and domestic demand. If residential and commercial building remains weak, subcontractors and smaller suppliers may remain exposed.
Second is the direction of employment and public finances. Rising unemployment can reduce household consumption and increase payment delays for small firms. At the same time, Finland is operating under tighter fiscal constraints, with the EU framework back in focus for member states, which can limit the scope for broad stimulus.
For now, the 2025 figures underline a key point: Finland’s insolvency cycle is no longer a narrow construction story, but a wider sign of stress across an economy still trying to return to steadier growth within the euro area.
