Insolvency Insights - Analysis of ASIC's March 2014 External Administration Appointment Statistics
The ASIC figures show 746 companies entered external administration in Australia during March 2014, a six-year low for the month of March (from data dating back to 1999). With 2,014 companies entering external administration in the first quarter of 2014, this also represents the lowest number of insolvencies for both a three month period and the start of a year since the first quarter of 2008.
Economic indicators for March were largely negative, apart from employment data, with unemployment falling from its recent high of 6.0% in February to 5.8% in March according to the Australian Bureau of Statistics.
Positive business and consumer sentiment seen since the 2013 federal election has started to wane. NAB’s business survey showed that although business confidence remained positive, it was down from February and January. Meanwhile, consumer sentiment slipped into negative territory, with the Westpac-Melbourne Institute’s survey falling to 99.5 points in March and deteriorating further since the federal budget.
This month we also take a closer look at the tourism and hospitality sector. On tourism, inbound arrivals have grown further in 2014, with 1.2 million visitor arrivals in the months of January and February 2014, an increase of 9.8% relative to the same period in 2013, according to Tourism Australia data. The fall in the Australian dollar in 2013 benefited inbound tourism last year, but it is yet to be seen whether a rise in the currency since January will reduce Australia’s attractiveness as a destination.