It’s been a horror year for many Australian brands forced to close their doors amid rising costs, with 40 per cent more businesses filing for insolvency since before the Covid-19 pandemic. CreditorWatch chief economist Ivan Colhoun said businesses were facing ongoing financial pressures much like their customers who were finding ways to cut their budget amid cost-of-living pressures. “Together with some greater caution in discretionary spending and softness in interest rate sensitive sectors of the economy, this unsurprisingly has led to higher voluntary business closures and some rise in insolvencies,” Mr Colhoun said.
“We’re yet to see the extent to which the 1 July tax cuts now flowing through the economy will ease some of the pressures on consumers and businesses.” The latest CreditorWatch business risk index found that Aussie businesses were failing at their highest rate (5.04 per cent) since the height of the Covid-19 pandemic in October 2020 (5.
08 per cent). The average failure rate for Australian businesses has climbed from 3.97 per cent in October last year.
The food and beverage sector recorded the highest failure rate of all industries in October, increasing to 8.5 per cent from 8.3 per cent in the 12 months up to September this year.
Administrative and support services were next with a 6.0 per cent failure rate in October, followed by arts and recreation services (5.9 per cent) and transport, postal and warehousing (5.
8 per cent). Meanwhile, both the r.