Business failures have hit their highest level since October 2020, with the hospitality and construction sectors seeing the most insolvencies, according to CreditorWatch.
The agency identified three main reasons for insolvency that failed businesses had in common: the higher cost of living, the higher cost of doing business, and the Australian Taxation Office's efforts to CreditorWatch predicted the sector's failure rate would rise in the coming 12 months to reach 9.1 per cent.Construction had the second-highest business failure rate, with a 12-month average of 5.3 per cent, however CreditorWatch's data showed it appeared to be "levelling out".It might be a labour of love, but passion isn't paying the bills for thousands of cafes and restaurants who are struggling to stay in business amid rising costs and falling demand.
Mr Colhoun said the rising arrears were "not surprising" given the higher cost of doing business and higher interest rate environment. "It does depend a little bit on whether we're seeing bigger businesses fail or smaller businesses fail, and it also depends on whether there's still reasonable demand for labour," Mr Colhoun said.
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