ASIC’s latest insolvency data for the nine-month period from 1 July 2023 to 31 March 2024, released today, shows an increase in the number of Australian companies failing.
During the period, 7,742 companies entered external administration, a 36.2% increase on the previous corresponding nine-month period ending 31 March 2023.
Out of these external administrations, construction (2,142), and accommodation and food services industries (1,174) represented the greatest number of company failures, accounting for nearly 27.7% and 15.2% respectively.
The data also revealed restructuring (878) and court liquidation appointments (1,593) increased by 294.6% and 218.8% respectively, when compared to the previous corresponding period. These numbers are higher than the numbers recorded for the full year period ending 30 June 2023, which were 447 and 1,081, respectively.
With only one quarter remaining this financial year, it’s expected that the number of companies entering external administration by 30 June 2024 will exceed 10,000, a level not seen since the 2012–2013 financial year.
Notably, the ratio of companies entering external administration compared to the number of registered companies (expected to be somewhere between 0.3% to 0.33% for the full year) is still less than 2012–2013 levels (0.53%), as over the same period the number of companies registered in Australia has increased from just over 2 million to 3.3 million.