-->

Small Business Risk Review Q2 2020: Industry Analysis

How did your industry fare in Quarter 2 2020?

We’ve revamped our Small Business Risk Review to bring you monthly insights and data from CreditorWatch’s 50,000+ strong database. In addition, at the end of every quarter, CreditorWatch will do a deep dive into key industries and reveal the stats that Australian businesses need to know.

Every industry has been affected in some way by COVID-19 in Q2, whether it’s been by changing the way they offer goods and services, meeting unprecedented consumer demand or dealing with slow-paying debtors. In fact, all industries except Mining reported a drastic increase in how late their payments were. Across all industries, on average, payment times rose by 342.7%.

The stats below are warning signs along the road to administration. However, temporary government relief measures and Safe Harbour legislation are propping up businesses that are at risk of falling insolvent.

Over the last three months, between 300-400 businesses have gone “missing” from administration statistics, meaning there is risk of a sudden surge in numbers once these relief measures cease.

Compare your industry in Q2 2020 to Q2 2019 below or head back to the blog for more Small Business Risk Review data.

Manufacturing

Payment Defaults YoY 39.1% decrease
Court Actions YoY No change
External Administrations YoY 20.7% increase
Number of Days Payment Overdue – June 2019 vs June 2020 11 to 31 days overdue

Helpful resource: Learn how this Victorian manufacturing company uses CreditorWatch and ApplyEasy to assess the creditworthiness of customers before doing business with them.

Construction

Payment Defaults YoY 9% decrease
Court Actions YoY 23.4%
External Administrations YoY 55.9% decrease
Number of Days Payment Overdue – June 2019 vs June 2020 15 to 53 days overdue

Helpful resource: Do you know how to mitigate the risk of using subcontractors in construction? Check out our free guide.

Wholesale Trade

Payment Defaults  YoY 16.2% decrease
Court Actions YoY 23.4% decrease
External Administrations YoY 30.2% decrease
Number of Days Payment Overdue – June 2019 vs June 2020 10 to 36 days overdue

Helpful resource: Registering on the PPSR is a vital way wholesalers can protect their security assets. Read our white paper on how you can protect your wholesale business in a time of crisis.

Retail

Payment Defaults  YoY 1.6% increase
Court Actions YoY 6.2% increase
External Administrations YoY 5.6% decrease
Number of Days Payment Overdue – June 2019 vs June 2020 9 to 42 days overdue

Helpful resource: As one of Australia’s most prominent retailers, Officeworks has had a busy period accommodating the influx of professionals working from home during the pandemic. Find out how they do their due diligence in their case study.

Accommodation and Food Services

Payment Defaults  YoY 50% decrease
Court Actions YoY 39.7% decrease
External Administrations YoY 55.6% decrease
Number of Days Payment Overdue – June 2019 vs June 2020 23 to 52 days overdue

Helpful resource: Use CreditorWatch’s Payment Predictor to identify and avoid slow-paying businesses in the accommodation and food industry.

Transport, Postal and Warehousing

Payment Defaults  YoY 20.8% decrease
Court Actions YoY 18.2% increase
External Administrations YoY 49.1% decrease
Number of Days Payment Overdue – June 2019 vs June 2020 12 to 90 days overdue

Helpful resource: Keep an eye on your risky debtors even when you’re on the road with CreditorWatch’s business monitoring tools.

Financial and Insurance Services

Payment Defaults  YoY 47.1% decrease
Court Actions YoY 41.2% decrease
External Administrations YoY 2.3% increase
Number of Days Payment Overdue – June 2019 vs June 2020 10 to 75 days overdue

Helpful resource: Streamlining manual processes helps save time and effort, which is why Prospa uses PPSRLogic to cut 7 minutes off the time it takes to create a PPS registration. Watch this video to find out how.

Health Care and Social Assistance

Payment Defaults  YoY 26.7% increase
Court Actions YoY 12.5% decrease
External Administrations YoY No change
Number of Days Payment Overdue – June 2019 vs June 2020 7 to 52 days overdue

Helpful resource: How often do you check in on the health of your database? Validating and cleaning up your data with a Portfolio Health Check helps you identify risky customers sooner.

Arts and Recreation Services

Payment Defaults  YoY 333% increase
Court Actions YoY 13.3% increase
External Administrations YoY No change
Number of Days Payment Overdue – June 2019 vs June 2020 6 to 60 days overdue

Helpful resource: The Arts industry has reported a huge 333% increase in payment defaults compared to Q2 2019. Find out how registering a default can help you get paid faster.

Learn more about CreditorWatch