Insolvencies across the board have peaked at 1,711 in May 2024, up by 59.9 per cent from last year.
This is according to new data from the Australian Securities and Investments Commission (ASIC), which show that insolvency rates have been steadily increasing post-COVID.
First-time insolvencies also hit a new peak in May, up 383 from the same time last year to 1,249 - or up 44.2 per cent.
Retail comes in fourth in overall business insolvencies at 949 in FY24 year-to-date as of June 23. This is below other services, with overall insolvencies at 1,287, followed by accommodation and food services (2,013) and construction (3,779).
Retail insolvencies are up 26 per cent in FY24 compared to 686 recorded in FY23.
In a media release dated April 19 this year, ASIC reported that in the nine-month period from July 1, 2023 to March 31, 2024, its insolvency data shows an increase in the number of Australian companies failing.
During that period, 7,742 companies entered external administration, a 36.2 per cent increase on the previous corresponding nine-month period ending March 31, 2023.
Out of these external administrations, construction (2,142), and accommodation and food services industries (1,174) represented the greatest number of company failures, accounting for nearly 27.7 per cent and 15.2 per cent respectively.
The data also revealed restructuring (878) and court liquidation appointments (1,593) increased by 294.6 per cent and 218.8 per cent respectively, when compared to the previous corresponding period.
These numbers are higher than the numbers recorded for the full year period ending 30 June 2023, which were 447 and 1,081, respectively.
“With only one quarter remaining this financial year, it’s expected that the number of companies entering external administration by June 30, 2024 will exceed 10,000, a level not seen since the 2012–2013 financial year,” ASIC noted.
Meanwhile, the ratio of companies entering external administration compared to the number of registered companies - which is expected to be somewhere between 0.3 per cent to 0.33 per cent for the full year - was still less than 2012–2013 levels (0.53 per cent), as over the same period the number of companies registered in Australia has increased from just over 2 million to 3.3 million.
The news comes following the calling of administrators by Australian fashion brands Dion Lee, Tigerlily and Marquee Retail Group this year.