ASIC data reveals SA business insolvencies growing 3-fold since 2021

If you thought you’d noticed more businesses going bust in SA than usual, these new details will prove very interesting. See the new list.

The number of businesses going into insolvency in South Australia over the past three years has increased threefold, the biggest rise on mainland Australia.

ASIC data released this month shows 449 South Australia companies had external administrators or controllers appointed because they were unable to pay their debts up from 2024.

That’s double the 224 insolvent businesses in 2023 and almost triple the 2022 level of 153.

In 2024, 192 of those were food or accommodation companies up from 80 in 2023.

Ninety-two of the 2024 insolvencies were construction companies up from 71 in 2023.

Insolvency does not necessarily mean that a business will close, although this did occur in around 40 per cent of insolvencies nationally last year.

Liquidation is a process where companies are wound down and their assets sold to pay back creditors.

In November 2024 South Australia hit a four-year monthly high with 90 insolvencies of all types of businesses around the state compared to 41 in December 2023.

The majority were companies with fewer than five employees

CreditorWatch CEO Patrick Coghlan said that while there had been “depressed numbers” of insolvencies during Covid he said current numbers reflected broad economic issues.

“Inflation has run hot for a long time. Costs are up for everyone. Interest rates are obviously really high, that impacts borrowing costs” Mr Coghlan told the Advertiser.

Mr Coghlan explained that a global downturn in consumer spending and sentiment meant “small business operators in the food and beverage space are the most impacted”.

He suggested that while commercial construction was not as affected by the economic climate, lower margin residential and construction companies that specialises in discretionary renovations would be hit hardest.

A rising number of SA business have been going into liquidations, ASIC figures reveal. Picture: iStock

Larry Moore from the Specialist Contractors Association SA said that cashflows for small and medium businesses have become so stretched that “even the slightest impact on delay in payments” from debtors means “people cannot go on”.

Senator for South Australia Kerrynne Liddle said, “With electricity prices for small business having risen by up to 52 per cent and Labor’s industrial relations agenda creating ever more red tape, it’s no surprise 2024 was the worst calendar year on record for business insolvencies.

However, Mr Coghlan said those comments were a “bit of politicising”.

He told the Advertiser the issue was that during Covid government’s around the world “printed a lot of money” to keep economies alive”.

“Every country around the world is suffering through a similar story, Australia is not the only one dealing with elevated rates and inflation.”