U.S. bankruptcies seen rising next year

WALTHAM, Mass., Dec. 4 (UPI) -- U.S. corporate bankruptcies are expected to increase by 17 percent in 2007, after falling an estimated 20 percent in 2006, a private group said Monday.

Global Insight also said that the majority of the increases are expected to occur in the metals, mining, and energy sectors, as well as in real estate and closely related industries, such as mortgage banking and residential construction.

The fallout from declining real estate markets will also affect areas of the financial sector, such as regional banks and mortgage-related institutions that have large exposure to the real estate markets, real estate brokers, and developers. The banking sector overall will be supported by continued economic expansion, albeit at a slower pace, and reasonably strong financial asset markets.

Nonetheless, there are growing pressures from an inverted yield curve and stiff competition for loans and deposits. Further, the growth rate of demand for new loans is expected to slow in both consumer and commercial credit in 2007.

Within the industrial sector, the machine tools industry is vulnerable to slowing domestic growth and a weak domestic autos industry. Building materials and related chemicals industries as well as textiles also are vulnerable.