Corporate insolvencies continue to break records
The number of corporate insolvencies in August 2011 was the second highest monthly figure on record, according to the latest Australian Securities and Investments Commission statistics.
In August this year, 1,049 companies entered some form of insolvency administration - a 20 per cent increase on the previous August. The highest figure on record is 1,095 in March 2009.
Cliff Sanderson, chief executive of Dissolve, a business specialising in low-cost company liquidations, said the August number was in line with record-breaking insolvency statistics in February, April, June and July this calendar year.
"What we are seeing this year is the highest number of corporate insolvencies since records have been kept, which is since 1999," Sanderson said.
Dissolve research found the cost of corporate insolvencies to the Australian banking sector in the 2010-11 financial year was $22 billion, Sanderson added - compared to the average pre-global financial crisis figure of $4 billion.
Breaking down the corporate insolvencies for the calendar by region, Tasmania and Western Australia have fared worst, according to Sanderson. Tasmanian insolvencies have doubled when compared to the same period over the past five years, and WA insolvencies are up 71 per cent.
"Victoria, South Australia and Queensland have had a material increase, whilst New South Wales has been relatively stable. Somewhat surprisingly, Queensland insolvency numbers are up only 24 per cent, which is not good, but not as bad as expected," Sanderson said.
"Anecdotally, business conditions are poor in Queensland - and we expect the number of insolvencies in Queensland to further increase over the remainder of the year as the effects of the floods are felt," he added.
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