Company Insolvencies per Year
The number of companies entering some form of insolvency administration in the 12 months to the end of November 2009 has increased by 26% to 9,544 companies when compared to the average of the previous five years. The number of insolvencies in November 2009 was a relatively modest 747. That was a 26% decrease from the prior year November and considerably off the peak of 1095 in March 2009. The graph follows and we provide some commentary below the graph.
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At Restructuring Works we experienced first hand the insolvencies following the October 1987 share-market crash. We think the number of corporate insolvencies is set to skyrocket in 2010. People forget what happened as recently as the last major stock market correction. Back then the stock market crashed in October 1987. The wave of large corporate insolvencies didn't begin until late 1988 and early 1989 with the likes of Bond Corp, Quintex, Equiticorp and Spedleys. It didn't hit the real economy until 1990 through to 1993 when the bad debt figures in the banks went through the roof and specialist insolvency firms quadrupled in size. This time the market has been on a long slide rather than a quick drop. We've seen a few very large companies hit the wall, and we list them at The Casualty List, and there are several other large ones teetering. After 1987, it took 4 years for insolvencies to peak with the number of insolvencies doubling and the value of those insolvencies up six fold. So far, we are only 18 months or less into this cycle so, if it follows 1987, it is still early days. This time around the number of insolvencies is up around 30%, which is in line with post-1987, but the value of insolvencies has already gone up six fold, so that is well ahead of post-1987.
Click on the following links to find details and some graphs of relevant statistics:
- Statistics for a summary of all relevant statistics and our comments
- ASIC statistics for an overview and our comments on the ASIC statistics
- Company Insolvencies per Year (ASIC based statistics)
- Insolvency Appointments by Secured Creditors per Year (ASIC based statistics)
- Restructurings as a percentage of Company Insolvencies (ASIC based statistics)
- Reserve Bank of Australia statistics for an overview and our comments on the RBA statistics
- Bank Lending to Business (RBA based statistics)
- Household Debt to Annual Disposable Income (RBA based statistics)
