Almost every industry suffered double-digit increases in the rate of business failure over the past year, with the biggest increases in external administrations in public administration and safety, healthcare and social assistance, and construction.
Credit reporting agency CreditorWatch said external administrations in public administration and safety were up 101 per cent over the 12 months to the end of November. External administrations in healthcare and social assistance were up 71 per cent.
CreditorWatch said both industries have a high proportion of government organisations, making the big increases in administrations a surprise.
“It is private businesses, such as those in the private security sector in public administration and safety that have contributed to a doubling of the rate of external administration,” it said.
“Healthcare and social assistance has seen a 71 per cent increase in the past year due to the failure of a number of small private businesses with National Disability Insurance Scheme contracts.”
Construction industry failures were up 59 per cent, due to project delays, cost blowouts, labour shortages and ongoing supply chain disruptions.
Arts and recreation was the only industry to see a drop in the rate of external administrations – down 23 per cent. CreditorWatch said this was thanks to activity in the entertainment industry returning to normal levels after COVID.
External administrations in the food and beverage industry were up just 8 per cent.
CreditorWatch said the average value of invoices for Australian businesses dropped 34 per cent over the 12 months and B2B trade payment defaults increased by 57 per cent since January.