The Australian business environment is becoming more challenging acording to the results of a new survey.
Creditor reporting agency, CreditorWatch has found that trade receivables, which is the average value of invoices, have declined and trade payment defaults have increased by 39% year-on-year. Credit enquiries have also risen by 129% year-on-year, and external administrations are expected to increase further throughout the year.
The BRI for January is the lowest point since CreditorWatch started collecting data in January 2015. In addition, court actions are at their highest level since September, up by 36% compared to January 2022.
The region with the lowest insolvency risk is Yarra Ranges in Victoria, while Gold Coast Hinterland in Queensland and Melton-Bacchus Marsh in Victoria are the regions with the highest risk of default across Australia.
CreditorWatch CEO, Patrick Coghlan, states that the results of the January BRI, especially the upward trend in trade payment defaults, suggest a tough year ahead for Australian businesses.
But he remains optimistic that inflation will peak soon, leading to an improvement in business and consumer confidence.
He adds the Australian economy is in a better position than most.