Do the conclusions surprise you?
In October, the Australian Securities and Investments Commission (ASIC) released the corporate insolvencies statistics for the 2018–2019 financial year.
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 2018 to June 2019 there were 10,747 corporate insolvency appointments recorded. Our analysis found:
- The June 2019 quarter recorded the most administrations (2,911) over the four quarters.
- The above number of appointments was an increase of 20% over the March 2019 quarter at 2,412 quarter, with December 2018 at 2,612 and September 2018 at 2,813 appointments each.
- Other (business and personal) services and Construction continue to dominate the insolvencies by industry profile at 36 percent and 19 percent respectively.
In each quarter we generally found the below industries ranked (as the top five) in the same order with some minor exceptions:
- Other (business & personal) services.
- Accommodation & food services.
- Retail trade.
- Transport, postal & warehousing.
Let’s now see where these 10,747 corporate insolvencies were located:
- New South Wales 34% (3,651)
- Victoria 28% (3,026)
- Queensland 20% (2,116)
- Western Australia 11% (1,205)
- South Australia 4% (408)
- Australian Capital Territory 2% (181)
- Tasmania 1% (91)
- Northern Territory <1% (69)
In terms of total appointments of 10,747, it was a decrease of 3% on the 2017-2018 year of 11,057 and total numbers have generally been decreasing since the 2012–2013 year where they stood at 15,815.
As to which industries were predominant in each state/territory we collated the table below.
|1||Other (business & personal) services (39%)||Other (business & personal) services (36%)||Other (business & personal) services (35%)||Other (business & personal) services (33%)|
|2||Construction (20%)||Construction (18%)||Construction (17%)||Accommodation & food services (20%)|
|3||Accommodation & food services (4%)||Accommodation & food services (4%)||Accommodation & food services (3%)||Construction (1%)|
|4||Retail trade (2%)||Retail trade (2%)||Retail trade (2%)||Retail trade (<1%)|
|5||Transport, postal & warehousing (2%)||Transport, postal & warehousing (1%)||Transport, postal & warehousing (1%)||Transport, postal & warehousing (<1%)|
|1||Other (business & personal) services (33%)||Other (business & personal) services (37%)||Other (business & personal) services (28%)||Other (business & personal) services (32%)|
|2||Construction (20%)||Accommodation & food services (17%)||Construction (26%)||Construction (23%)|
|3||Accommodation & food services (1%)||Construction (<1%)||Retail Trade (<1%)||Accommodation & food services (<1%)|
|4||Retail trade (1%)||Transport, postal & warehousing (<1%)||Accommodation & food services (<1%)||Retail Trade (<1%)|
|5||Mining (1%)||Other (<1%)||Unknown||Professional scientific & technical services (<1%)|
The above clearly shows that New South Wales, Victoria, Queensland and Western Australia share a very similar industry profile though for Western Australia, Mining remains within the top five which could mean that WA is still enduring the fallout of the mining sector downturn.
The interesting thing for South Australia is that last year, Manufacturing came in at third and this time it has dropped out of the top five.
The remaining states and territories continue to have the industries of Agricultural Forestry & Fishing, Arts & Recreation Services, Professional Scientific & Technical Services, and Information Media & Telecommunications included in their top five.
The mining sector has been subject of much debate in recent times for various reasons, however despite people’s opinion, we are not seeing many mining corporate appointments. In fact, from our work in the regions we are actually hearing of an increase in work generally in the mining sector.
The thing to note though, is that total insolvency appointments are still on the decline.
We will continue to monitor, watch this space.