Construction dominated Queensland's insolvency reports, with 365 companies in external administration. By Sopie Foster From: The Courier-Mail November 24, 2011
ONE QLD construction business per day went into administration in the past financial year, the highest level of corporate insolvency of any industry in the state.
Data released by the Australian Securities and Investments Commission showed Queensland's small business owners continue to bear the brunt of uneven economic conditions, making up more than 80 per cent of the state's initial insolvency reports.
Queensland's small business insolvency is higher than the national average of 78 per cent.
Of the 1468 initial external administration reports filed for Queensland businesses, 1192 involved companies that employed fewer than 20 people.
Of those, 924 businesses had fewer than five full-time employees, and 268 had between five and 19 on the payroll.
The state's spate of natural disasters was nominated as the reason for 19 Queensland businesses going into insolvency, while 543 believed their failure was caused by poor economic conditions.
Queensland's most high-profile administrations this year have included Wayne Osmond's Refund Home Loans and developer Russell McCart's Meridien Airlie Beach Pty Ltd and Meridien AP Pty Ltd.
Construction dominated the state's insolvency reports, with 365 companies in external administration in Queensland, followed by 283 business and personal services operations and 191 retailers.
Coming off the hard year that tourism has had, 120 accommodation and food services businesses had reports filed.
Manufacturing was also in triple digits with 105 businesses facing fresh external administration scrutiny.
"The small end of town has particularly struggled since the global financial crisis to attract finance and they've also had a compression in what they can raise through property," said Chamber of Commerce and Industry Queensland president David Goodwin.
"They've been exposed to the tourism and construction downturn. The lack of economic demand is still rating as the No.1 business concern in Pulse surveys. Government uncertainty around legislation is also driving nervousness in business community.
"That combination of factors is toxic for small business. A lot have spent their savings propping up unprofitable businesses and we haven't, unfortunately, hit the bottom yet."
In ASIC's overview of corporate insolvencies in the country, it found that the percentage of small businesses in insolvency had grown 1 percentage point over 2009-2010.
Nationally, business and personal services and construction made up 46 per cent of initial external administration reports.
ASIC said that in 11 per cent of the cases, external administrators had evidence in their possession and believed that further inquiry was warranted.
