BUSINESS FAILURES UP 7.8%
The number of failed businesses in Australia has increased by 7.8 per cent in the first quarter of the year, compared to figures from the first quarter of 2014, with all states and territories experiencing a rise in the number of firms that sought legal relief from creditors or ceased operations without paying their creditors in full.
According to the latest analysis by Dun & Bradstreet (D&B), there were 12,383 failed businesses in the three months to March, up from 11,490 a year earlier, but down slightly from the previous quarter’s 12,509 figure. The numbers include businesses which have entered external administration and liquidation – information reported to ASIC – and those operations which were involuntarily deregistered and deemed insolvent at the time of closure.
The increase in failed operations during the three months to March has been eclipsed by the creation of 53,755 businesses during the quarter, up 1.9 per cent from the 52,773 new businesses created during the previous quarter and representing an increase of 6.4 per cent compared with figures from the same period last year. The new market entrants have increased the overall number of businesses in operation in Australia during Q1 2015 to about 2.145 million.
National Comparison – New Business Startups vs Business Failures
New South Wales
According to D&B’s analysis, New South Wales saw the nation’s largest rate of growth in business start-ups during Q1, with 18,198 businesses commencing operations, an 8.1 per cent increase from the 16,841 created during the same period last year. D&B also recorded 4,296 failures in NSW, up 15.5 per cent from the 3,720 figure recorded in Q1 2014.
Victoria saw the nation’s second-largest rate of growth in business start-ups, with 17,083 entering the market, a 1.4 per cent increase on last year’s 15,434. Across the same period, business failures in Victoria jumped from 2,669 to 3,174.
Queensland reported an 18 per cent increase in business failures between Q1 2014 and Q1 2015, with the figure moving from 2,106 to 2,492. However, failures were down 1.5 per cent compared with the previous quarter. Meanwhile, new business start-ups increased by 1.7 per cent in Q1 2015 on a year-on-year basis, from 10,259 to 10,434.
Western Australia reported a 7 per cent increase in business failures between Q1 2014 and Q1 2015, with the figure rising from 824 to 888. However, the latest figure represents an 8.4 per cent decrease compared with the previous quarter. New business start-ups in Q1 2015 decreased by nearly 2 per cent compared with Q1 2014, with the figure dropping from 4,687 to 4,594.
The ACT saw a 33.3 per cent increase in business failures, with the figure increasing from 141 in Q1 2014 to 188 in Q1 2015. New business start-ups increased 9.1 per cent over the same period, from 805 to 878.
South Australia recorded a 2.6 per cent increase in business failures on a year-on-year comparison, with the figure climbing from 461 to 473. The state also suffered a 0.2 per cent decline in new business start-ups over the same period, with the figure dropping from 1,732 to 1,729.
Business failures figures from the Northern Territory have remained relatively stable since Q3 2014; the latest figure of 75 represents a 2.7 per cent increase from the previous quarter and a 1.4 per cent rise from a year earlier. Meanwhile, new business start-ups increased by 18.8 per cent on a year-on-year basis to 272.
The Apple Isle recorded a 21.3 per cent increase in business failures, with the figure climbing from 75 in Q1 2014 to 91 in Q1 2015. However, the figure represents a 14.2 per cent decline when compared with the previous quarter. New business start-ups declined by 0.2 per cent on a year-on-year basis, from 1,732 to 1,729.