Spotlight on new and failed businesses

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Amid tough trading conditions, uncertainty around the future government and patchy consumer confidence, it may come as little surprise that the number of failed business in Australia has increased, while the number of new business start-ups has fallen.

New research from Dun & Bradstreet shows business failures jumped by 7% in the first quarter of 2016 compared to Q4 2015, with business failures up by 5.2% on a year-by-year basis.

There were approximately 12,023 failed businesses in the first quarter of 2016, compared to 12,170 in the previous quarter and 12,383 a year earlier.

According to Dun & Bradstreet, the numbers include businesses that have entered external administration and liquidation (information reported to ASIC) and operations that were involuntarily deregistered and deemed insolvent at the time of closure.

The credit bureau highlights all states and territories except South Australia experienced an increase in the number of firms that sought legal relief from creditors or ceased operations without paying their creditors in full.

So how is the number of new businesses in Australia faring? Approximately 52,626 new businesses were created in the first quarter of 2016, however, this is a 5.6% drop on the previous quarter (55,746) and is down 2.1% on the same period a year ago.

The research shows all states and territories posted a decrease in the number of new businesses created in Q 1 2016 compared to the previous quarter, while South Australia was the only state to record a lift in the number of new businesses compared to one year earlier.

“The new market entrants have increased the overall number of businesses in operation in Australia during Q1 2016 to approximately 2.28 million,” Dun & Bradstreet says.

The state-by state results for Q1 2016 are as follows:

New South Wales

Business failures: 4,405 (up 2.5% year-on-year)

New businesses: 16,544  (down 10% year-on-year)


Business failures: 3,335 (up 4.8% year-on-year)

New businesses: 14,305 (down 19.4% year-on-year)


Business failures: 2,743 (up 9.2% year-on-year)

New businesses: 9,132 (down 14.3% year-on-year)

Western Australia

Business failures: 1,124 (up 21% year-on-year)

New businesses: 4,130 (down 11% year-on-year)

South Australia

Business failures: 445 (down 6.3% year-on-year)

New businesses: 1,970 (up 12.2% year-on-year)

Northern Territory

Business failures: 96 (up 21.9% year-on-year)

New businesses: 198 (down 37.4%)


Business failures: 98 (up 7.1%)

New businesses: 381 (down 8.7% year-on-year)


Business failures: 194 (up 3.1% year-on-year)

New businesses: 830 (down 5.8% year-on-year).

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