BUSINESS FAILURES SURGE IN Q3
The number of failed businesses in Australia jumped by 17.7 per cent in the third quarter of the year, compared to figures from the third quarter of 2014, with all states and territories experiencing an increase 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 13,615 failed businesses in the three months to September 2015, up from 11,565 a year earlier and 9,304 over the previous quarter. The latest figure marks the highest rate of business failures recorded over the past two calendar years.
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.
During the three-month period to September, 63,502 new businesses were created, down 7.5 per cent from the 68,665 new businesses created during the previous quarter, but representing an increase of 8.2 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 Q3 2015 to approximately 2.22 million.
New South Wales
According to D&B’s analysis, New South Wales reported 4,592 business failures over Q3 2015, up 25.8 per cent compared with Q3 2014, and representing an increase of 46.2 per cent from the previous quarter. New business start-ups for Q3 2015 increased by 9.8 per cent year-on-year, from 20,207 to 22,188.
Victoria’s business failures jumped 26.6 per cent between Q3 2014 and Q3 2015, from 2,601 to 3,294. On a quarter-to-quarter basis, the latest result represents an increase of 43 per cent. Meanwhile, new business start-ups increased 9.9 per cent year-on-year, with the figure moving from 18,125 to 19,915.
Queensland recorded a 31.3 per cent increase in business failures between Q3 2014 and Q3 2015, from 2,139 to 2,808, and a 41.6 per cent increase on a quarter-to-quarter basis. New business start-ups in Q3 2015 increased by 4.7 per cent compared with Q3 2014, from 11,398 to 11,934, but the figure represents a decline of 9.2 per cent compared with the previous quarter.
Western Australia faced a difficult quarter, with the state recording a 41.0 per cent rise in business failures on a year-on-year basis, from 846 in Q3 2014 to 1,193 in Q3 2015. When compared with the previous quarter, business failures actually increased 66.9 per cent. New business start-ups fell 0.1 per cent, from 5,182 in Q3 2014 to 5,176 in Q3 2015.
Business failures in South Australia increased 47.9 per cent between Q3 2014 and Q3 2015, from 357 to 528, while the figure was up by 61.5 per cent on a quarter-to-quarter basis. Meanwhile, new business start-ups increased by 13.0 per cent between Q3 2014 and Q3 2015, from 2,031 to 2,296, although the latest figure represents a 1.8 per cent decrease on the previous quarter.
The Northern Territory recorded a 20.3 per cent increase in business failures between Q3 2014 and Q3 2015, from 74 to 89. On a quarter-to-quarter basis, failures jumped 48.3 per cent. Meanwhile, new business start-ups declined by 28.5 per cent year-on-year, falling from 295 to 211, while the latest figure represents a 33.2 per cent decline compared with the previous quarter.
Business failures in Tasmania increased by 17.3 per cent between Q3 2014 and Q3 2015, from 75 to 88, and 18.9 per cent on the previous quarter. New business start-ups rose 8.5 per cent on a year-to-date basis, from 461 to 500, although the figure represents a decrease of 5.3 per cent when compared with the previous quarter.
The Australian Capital Territory saw a 28.5 per cent increase in business failures, with the figure moving from 165 in Q3 2014 to 212 in Q3 2015. Compared with the previous quarter, business failures increased by 48.2 per cent. Meanwhile, new business start-ups increased 21.9 per cent in Q3 2015 compared with the prior corresponding period, moving from 859 to 1,047.