Business liquidations rose by 20.8 percent year-on-year in October as 215 more companies went under due to the crippling impact of the Covid-19 pandemic on economic activity. Picture: Steve Buissinne/Pixabay
Business liquidations rose by 20.8 percent year-on-year in October as 215 more companies went under due to the crippling impact of the Covid-19 pandemic on economic activity. Picture: Steve Buissinne/Pixabay

Business liquidations rose by 20.8% year-on-year in October

By Siphelele Dludla Time of article published Nov 24, 2020

Share this article:

JOHANNESBURG - Business liquidations rose by 20.8 percent year-on-year in October as 215 more companies went under due to the crippling impact of the Covid-19 pandemic on economic activity.

South African companies have been struggling to stay afloat as the economy takes long to recover since the introduction of Covid-19 lockdown restrictions at the end of March.

Statistics South Africa (StatsSA) yesterdaysaid that the total number of liquidations increased by 33.2 percent in the three months ended October compared with the same period in 2019.

StatsSA said that compulsory liquidations increased by 21 cases and voluntary liquidations increased by 16 cases.

The finance, insurance, real estate, business services industry experienced the highest liquidations amounting to 79 in October, 68 of them voluntary, while the trade, catering and accommodation industry with 40 liquidations in the month had the second highest score.

However, the total number of liquidations decreased by 4.7 percent in the first ten months of 2020 compared with the first ten months of 2019.

Meanwhile, StatsSA said the estimated number of insolvencies, which relate to individuals and partnerships, decreased by 38.3 percent year-on-year to 153 cases in September.

There was a 57.7 percent decrease in insolvencies in the third quarter of 2020 compared with the same period last year.

Seasonally adjusted insolvencies increased by 30.8 percent in September compared with August.

Investec’s Kamilla Kaplan said insolvencies were at risk of increasing in the coming quarters amid household financial stress.

TransUnion SA Consumer Credit Index for the third quarter consumer credit health remained weak amid diminished incomes, and elevated levels of consumer indebtedness.

BUSINESS REPORT ONLINE

Share this article:

Related Articles