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30 Jun 2016

The Who and Where of Corporate Insolvencies


3 min


Does our analysis surprise you?

Last month, the Australian Securities and Investments Commission released the corporate insolvencies statistics for the March 2016 quarter.

We decided to analyse the numbers further to find which industries were affected and in which state/territory the corporate insolvencies were recorded over a 12 month period.

Let's start with the parameters of our analysis.

From June 2015 to March 2016 there were 10,299 corporate insolvency administrations recorded. Our analysis found:

  • The September 2015 quarter recorded the most administrations (2,960) over the four quarters.

  • Since reaching this peak, the totals have declined in the subsequent quarters (December 2015 and March 2016).

  • Other (business and personal) services and Construction dominated the insolvencies by industry profile with 38 percent and 17 percent respectively.

In each quarter we found the below industries ranked (as the top five) in the same order:

  1. Other (business & personal) services.

  2. Construction.

  3. Accommodation & food services.

  4. Retail trade.

  5. Transport, postal & warehousing.

Except for in the March quarter where Manufacturing took fifth place (instead of Transport, postal & warehousing).

Let’s now see where these 10,299 corporate insolvencies were located:

  • New South Wales 34% (3,521)

  • Victoria 28% (2,875)

  • Queensland 21% (2,184)

  • Western Australia 10% (1,006)

  • South Australia 4% (402)

  • Australian Capital Territory 2% (170)

  • Northern Territory 1% (73)

  • Tasmania <1% (68)

In terms of which industries were predominant in each state/territory we collated the table below. To give the analysis greater meaning, we excluded 'Other (business and personal) services' that accounts for 38 percent of Australia's corporate insolvency administrations.

[table id=7 /]

[table id=8 /]

The above clearly shows that New South Wales, Victoria, Queensland, and South Australia share the same industry profile. Once Western Australia (WA) enters the equation, we see for the first time, Mining appears within the top five which could mean that WA is still enduring the fallout of the mining sector downturn.

The remaining states and territories introduce these industries: Education and Training, Agricultural Forestry & Fishing, Arts & Recreation Services, Professional Scientific & Technical Services, and Information Media & Telecommunications.

Given the innate resources in each state and territory you can understand where you see a shift in the analysis.

The mining sector has been subject of much debate in recent times for obvious reasons. However, the analysis above doesn't illustrate the relationship between ancillary businesses that supported the mining industry.

We will continue to monitor, watch this space.

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