28 QLD companies collapse at start of 2021
FEWER Queensland companies hit the wall last month compared to the same period in 2020 despite the end of COVID-19 debt holidays.
The Sunshine State recorded 60.6 per cent fewer businesses going bust in January with 28 insolvencies compared to 71 recorded in the same month in 2020.
Construction remains the worst hit industry across Australia for business insolvencies with 27 more firms in the sector collapsing in January.
The bust in construction work comes amid a broader downturn in the high rise commercial and residential market, marked by the implosion of industry titan Grocon that tipped even more of its operations into insolvency on New Year's Eve.
January marks the first month for many businesses trading without the extended temporary debt protection imposed by the Federal Government in the early days of the pandemic.
Creditorwatch chief executive Patrick Coghlan said numbers came as "no surprise" but flagged far higher figures as the economy exited government support in the coming months.
"We're expecting to see an increase in court action, particularly default judgements, as creditors start to chase debt with a bit more vigour and not having to wait six months," Mr Coghlan said. "We'll also see an increase in administrations at least back to 2019 numbers."
Creditorwatch, which tracks average payment times across businesses, said the numbers would come to a head leading out of April with the end of JobKeeper.
"We're not going to see the tsunami that was projected for September that ended up getting pushed out to March," he said. "But there will be businesses still solely reliant on Jobkeeper to keep them afloat and that will be the death knell."
Following in the wake of the wreckage left by construction, accommodation and food services were the second worst casualty of the COVID crunch.
At least 27 operators in the food services and accommodation sector have joined the list of insolvencies since December.
Restrictions imposed and relaxed in topsy turvy measure across the economy throughout the year have played havoc with the hospitality sector.
Trailing the pack as the third worst for business busts in January were financial and insurance services, with 18 ending operations in January.
New South Wales leads Australia for business insolvencies in the latest weeekly data from the corporate regulator.
Data from the Australian Securities and Investments Commission shows 192 business busts across Australia in January, down 51.6 per cent from the same month in 2020 just as the COVID-19 wave was threatening to crash down.
The data reveals 72 business went bust in NSW in the month of January.
This was down 48.9 per cent from the 141 that went out of business in the same month in 2020.
The state leads Australia with 831 business insolvencies in the financial year.
This sees the state join many others coming in more than 50 per cent below their pre-pandemic peaks.
NSW was swiftly followed by Victoria where 51 businesses went to the wall in January but still a long way from the toll recorded the year before where 124 operations were forced to close.
At least 660 businesses have shut their doors in Victoria in the financial year after the state was savaged by long months of lockdowns.
Victorian businesses have benefited from an extension of COVID-19 relief, including payroll relief payments by the state government to business.
West Australia recorded 21 business busts in January down almost a third from the same month in 2020.
South Australia was closest to its pre-pandemic levels in January, notching up 14 closures, barely a nudge on the 16 that were recorded going bust in the state the year before.
Between them Tasmania and the Northern Territory only recorded one business insolvency each.