A continuation of Australia’s “phantom” COVID lockdown could threaten the nation’s economic recovery in 2022 and trigger a worse-than-expected surge in insolvencies, with hospitality, tourism and retail businesses in capital cities particularly at risk of failure.

Businesses and consumers are cashed up and ready to spend and invest, but if Omicron restrictions and supply chain issues drag on, many businesses will face a cash and credit crunch and struggle to survive.

Business insolvencies are expected to rise in 2022 as creditors resume normal collections activities. But insolvencies will increase more if Government and self-imposed restrictions aren’t lifted.

Contributors:

• Patrick Coghlan, CEO CreditorWatch
• Jamie Osborn, CEO Shift
• Nerida Conisbee, Chief Economist Ray White
• Harley Dale, Economist
• James O’Donnell, Data Analyst Open Analytics