Fewer South African firms going under

19 December 2012

The total number of liquidations of South African companies decreased in November by 51% year-on-year‚ after a 35.3  percent year-on-year decrease in October‚ Statistics SA data released on Thursday showed.

Liquidation figures give an account of the level of unpaid debt in South Africa, as well as how many businesses or firms go under. The downside to company liquidations is mainly job losses.

The number of liquidations recorded for the eleven months of this year fell by 22.1% compared with the eleven months of last year.

The 51% year-on-year decrease in the number of liquidations in November was due to voluntary liquidations‚ which decreased by 147 and compulsory liquidations which decreased by 56.

Close corporation liquidations decreased by 123 and company liquidations decreased by 80 over the period.

The largest year-on-year decreases in November in total liquidations related to businesses in the financing‚ insurance‚ real estate and business services industry‚ which recorded 92 fewer liquidations; wholesale and retail trade‚ catering and accommodation‚ with 72 fewer liquidations; and the construction industry‚ with 24 fewer liquidations.

The number of insolvencies decreased by 14.4% in the first ten months of this year compared with the same period last year.

A year-on-year decrease of 12.1% was estimated in October‚ after a year-on-year decrease of 15.8% in insolvencies was estimated for September.

Stats SA reported a 14.3% decrease was estimated in the three months ended October this year compared with the same period last year.