CANBERRA, AAP – Business activity around Australia is weaker than had been hoped after COVID-19 restrictions were eased, with a spike in defaults and court actions reported.
Despite the recent end to lockdowns in Melbourne and Sydney, coupled with the booming Black Friday sales weekend, small business trade activity remains weak.
While many were hoping the first post-lockdown month would see a bump in business activity, data from digital credit reporting agency CreditorWatch paints a picture of a long and slow recovery.
CreditorWatch says there was a 53 per cent spike in the number of defaults reported in November, signalling the post-lockdown period isn’t entirely comfortable for small and medium-sized enterprises.
Court actions involving firms also surged 85 per cent in November, while the number of external administrations was up 15 per cent, the second consecutive monthly increase.
However, credit enquiries also rose by 17 per cent in the month.
“The increase in credit enquiries in November is an encouraging forward indicator of business confidence, however, there’s a long way to go before business activity is at pre-COVID levels,” CreditorWatch CEO Patrick Coghlan said.
“Worryingly … we also saw significant increases in defaults and administrations. Businesses in the Sydney and Melbourne CBDs in particular are at historically high probabilities of default.”
Nationally, the CreditorWatch business risk index – a pointer to the probability of default – was little changed at 5.79 per cent in November compared to 5.8 per cent in October.
The report found the region at least risk of default was the Murray River-Swan Hill area in Victoria with an index of 3.69 per cent.
The Merrylands-Guildford region in NSW and the northern Gold Coast area were considered the most at risk, both with indexes of 7.73 per cent.
Meanwhile, the National Skills Commission will give its latest assessment of demand for skilled workers when he releases its preliminary vacancy report for November on Wednesday.
In October, the commission said job advertisements posted on the internet rose by 7.8 per cent, the second consecutive month of growth in recruitment, and at 250,900 positions was the highest in 13 years.