Australian businesses are caving in at the highest rate since before the COVID-19 pandemic began, new data shows, suggesting a long-forecast wave of insolvencies is now surging over the Australian economy.
Figures released by the Australian Securities and Investments Commission (ASIC) this week show 831 businesses appointed external administrators or had controllers appointed in March, the highest monthly reading since July 2019.
That number represents a 20% uptick from February, but a 79% increase since March 2022, which saw a comparatively low 464 business collapses.
Builders and construction firms remain the hardest hit, reflecting how a surge of pandemic-era demand was undercut by massively inflated material costs, supply chain hold-ups, and difficulties finding qualified workers to complete a backlog of work.
So far this financial year, 1,601 construction-related firms have called in the administrators or had a controller appointed, double the 808 accommodation and food services businesses to have collapsed in the same timeframe.
Court-administered appointments are on the rise, as creditors leave lockdown-era leniency in the past and chase firms for what they owe.
ASIC tallies 852 court appointments so far this financial year, ahead of the 761 recorded in the financial year leading to April 2021.
However, this year’s tally is still overshadowed by the pre-pandemic baseline figures, with more than 2,000 court appointments usually recorded at this point in the financial year.
More to come.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
