The number of companies going out of business jumped more than 50 per cent between July and September, even as new businesses continued to be created.
There were 185 insolvencies during the third quarter of the year, up from 120 a year ago, according to credit risk firm CRIFVision-net. The increase suggests inflation pressures are starting to have an impact on businesses, the company said. Even so, the number of companies being created rose 12 per cent year-on-year with more than 5,000 businesses formally set up. Key sectors such as hospitality, construction and IT all saw the number of new businesses registered jump by more than 10 per cent compared to the same period 12 months ago.
“Despite the presence of several global challenges, the determination of local entrepreneurs remains unwavering, showing a robust willingness to invest in new ventures,” Christine Cullen, managing director of CRIFVision-Net said. “Inflation persistence has prompted challenges for businesses, particularly around areas like repayments, given the backdrop of elevated prices and the rising interest rate environment.
Ms Cullen called for the Government to “provide robust supports to businesses” in this week’s budget amid higher interest rates and inflation. Still, the business community remains “confident,” she added.