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Small Business Risk Review Quarter 3, 2019: Topsy-turvy business conditions endure

CreditorWatch’s Small Business Risk Review for Quarter 3, 2019 highlights a large increase in the value of court actions in Queensland, concerning change for Western Australia and an increase in insolvencies across Australia.

Quarter 3, 2019 continued to highlight the unstable and uncertain economy that Australia has been experiencing this year.  As Australia remains on the brink of recession, other issues like the drought, cost of living and struggling industries at are also contributing factors to an unstable economy. We saw the collapse of travel agencies like Thomas Cook and more retail failures. Not to mention international influence such as the trade tensions between the United States and China.

According to the NAB Quarterly SME survey for Quarter 3, 2019, SME business confidence declined in Quarter 3 and conditions remained below their average levels a year ago. According to the survey, large businesses are now underperforming the SME sector.

The only thing we know for sure is what the data shows. Let’s start with Year on Year% (YOY) for court actions in Queensland. The volume has increased by 25% in comparison to – 16% last year and dollar amounts have increased by 444% in comparison to – 19% last year.  Looking at this quarter versus last quarter, we have seen a 1% increase in volume and dollar amounts have increased by 348%.

NSW court actions and dollar amounts have continued to increase from last quarter by nearly 50%. In a year on year comparison, the volume increased by 63% and the dollar amount increased by 85%.

South Australian dollar amounts continue to rise with a slight 2% decrease in the volume of court actions. Victoria has seen its first small decrease in volume of court actions and dollar amounts since Quarter 2, 2018.

Western Australia is no longer enjoying its run of declining court actions and dollar amounts. It has seen a significant increase of 21% in court actions and 52% increase of dollar amounts in the year on year comparison. WA has seen an 8% increase of court actions and 36% increase of dollar amounts since last quarter.

The volume of payment defaults registered increased by 13% in comparison to Quarter 3, 2018.

Insolvencies have continued to climb by 5% YOY and 20% Quarter 2, 2019 vs Quarter 3, 2019.

However, bankruptcies have fallen by 24% nationwide with the exception of WA which increased by 3%.

In these uncertain times, business owners should be looking at data as a means to empower themselves with the knowledge they need to make appropriate decisions. It’s an opportunity to improve due diligence processes, review terms, review cash flow and invest in the necessary technology and advice.

Now is the time to take action, not watch from the sidelines.

For more information, download the infographic and watch the webinar.

Infographic

 

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Small Business Risk Review Quarter 2, 2019 – What’s going on with NSW, SA and VIC?