Trouble in mining speculated as November insolvency figures remain high
The number of businesses entering insolvency dropped in November, from both the previous month and the previous year, although experts warn the industry is still in a quiet period before the traditional post-Christmas rise in collapses.
And while the statistics aren't broken down into industries, the rising number of collapses in Western Australia has prompted speculation the mining sector may be experiencing more problems.
The latest figures from the Australian Securities and Investments Commission show 1,357 companies entered insolvency in November 2012, compared to 1,374 in October and 1,513 in November of 2011.
But Cliff Sanderson, liquidator at Dissolve, says the numbers are still generally at an all-time high.
"They're down from the previous November, but they're still bouncing around at that high level. For the past six months they've been up and down around those higher figures."
The 2012 calendar year is shaping up to be one of the worst on record for insolvencies, with a total of 15,415 businesses entering some form of insolvency. December statistics are due to be released in early February.
Sanderson says the November figure is typical for the last few years after the global financial crisis, meaning there are "no great surprises".
However, the state-based statistics reveal some fascinating insights. Over the past few months, insolvencies have slowly been rising in Western Australia, from as low as 62 back in January 2012 to 121 in November. A total of 82 businesses appointed external administrators – the highest on record.
Sanderson says Western Australia has been hitting some of its highest figures for a while now – although stops short at assigning any sort of trouble to the mining industry.
"It hit some high numbers for a lot of last year," he says, adding that within New South Wales companies in the retail and construction businesses are still experiencing the most insolvencies. Both industries have experienced the most collapses over the past few years.
Queensland has also seen a sharp rise in its insolvencies, recording 330 in November, from as low as 241 in July. New South Wales has recorded the highest number of insolvencies, at 467, while Victoria followed with 361.
"We're seeing the traditional stuff here, we regularly get retail jobs. The last couple of years have seen a lot of trade-based businesses," he says.
Sanderson says the industry will be going through a quiet period over the next month or two, before statistics are revealed for February and March towards the middle of the year.
Many retail businesses tend to collapse in the first quarter of the year, after hanging on through the Christmas period.