The March 2024 CreditorWatch Business Risk Index reveals that external administrations are now “at a record high” as Australian businesses continue to battle cost pressures, skilled labour shortages and declining consumer demand.
External administrations were up 22.1 per cent year-on-year to March, CreditorWatch said.
In certain industries (and even plenty of industries) insolvency risks are soaring (as the chart shows) – but not in the industries a casual observer might expect.
Public administration, electricity, gas and water and even mining are showing surprising levels of stress.
More typical industries remain a red hot worry, at least to the analysts at CreditorWatch.
Of the more than 15,000 tax debt default records CreditorWatch currently holds from the Australian Taxation Office (covering outstanding debts of more than $100,000), 23.8 per cent of businesses are in the construction industry, followed by 12.5 per cent in professional, scientific and technical services and 10.7 per cent in food and beverage services, the Business Risk Index shows.
“Businesses in the food and beverage services sector remain the most at risk of business failure (7.44 per cent) by a considerable margin” CreditorWatch said.
“Public Administration and Safety is the next riskiest industry at 5.66 per cent, followed by Arts and Recreation Services (5.42 per cent).”