Court actions are on the rise, business insolvencies are out of control in hospitality and while insolvencies are stabilising, business risk overall is rising.
The May 2025 Business Risk Index from CreditorWatch shows the business closure rate over the year to April 2025 in hospitality was near enough to 10%, at 9.6%.
Seven more industries have closure rates that hover around six per cent, including construction (5.7%) and transport (6.2%), both sectors with a history of getting worse and dragging the economy down with them.
“Insolvencies not evenly spread - construction and hospitality account for around 40% of all insolvencies” CreditorWatch said.
Trade payment delays are 2.15% in construction so you be sure there will soon be many more builders going under in this industry.
The insolvency rate in food and beverage services surged 66 per cent over a year and this sector now looks toxic.
Discretionary spending “looks soft” Westpac said in its April 2025 Card Spend Trackers, also released yesterday.
In a contrarian observation Westpac said: “Hospitality retail looks to be improving significantly, growth moving back into positive.
“ However, conditions remain difficult for non-food retail, with card activity still slipping lower. Basic food retail has been steadier throughout the last few months.”
Western Sydney tops the list of highest-risk regions, CreditorWatch said.