Insolvencies Hit Record High

February 25, 2013, 1:56 pm Kochie's Business Builders Yahoo7

Australia had a record number of insolvencies last year. Here are the biggest to go down, and the outlook ahead...

Insolvencies Hit Record High

As if we needed further proof 2012 was a tough year for business, in come insolvency figures revealing a record number of business busts.

Analysis of Australian Securities and Investments Commission data by insolvency outfit Taylor Woodings has revealed a whopping 10,632 shops were forced to shut their doors in 2012. That’s a remarkable 12.7% higher than in 2009, at the depths of the financial crisis.

And unfortunately, the outlook remains pretty bleak.

“We predict 2013 will remain a challenging year for many Australian businesses due to continued low consumer confidence and the stubbornly high Australian dollar,” Taylor Woodings says.

“The industries that we expect to face the most challenges in 2013 are retail, property and construction, and tourism. Some segments of the mining services sector may also face difficulties as the mining construction boom slows.”

That’s a continuation from 2012 where the construction sector wrestled with the highest number of insolvencies, accounting for 22% of all firms that went into administration or receivership over the year.

And while retail trade struggled too, falling every month over the last quarter of 2012, Taylor Woodings expects some rebound in spending on non-essentials.

“While overseas and online competition will continue to impact many Australian retailers in 2013, low interest rates and the current stable employment levels should start to boost discretionary spending.”

It’s an interesting insight into how little trading conditions have improved since the onset of the GFC and the ongoing challenges faced by small businesses around the country. But, looking back, it also might have been the purge we had to have and it’s efficiently upward from here.