Company collapses spiked 114 per cent in February in Western Australia, sparking fears the mining sector is sucking life out of non-resource related business.
Accounting firm Taylor Woodings, a specialist in restructuring and corporate recovery, on Thursday released its analysis of insolvency data for February 2012 from the Australian Securities and Investments Commission (ASIC).
Nationally, the number of company collapses hit a record high in February as businesses continued to suffer lagging effects from the global financial crisis (GFC).
Taylor Woodings said the number of company collapses more than doubled to 1,123 in February 2012 - the highest monthly insolvency figure on record - from 518 in January 2012.
January typically shows a lower level of insolvencies because many people are on holidays and courts that would issue wind-up orders are closed.
Nonetheless, insolvencies in February 2012 were 31 per cent higher than in February 2011 and up 47 per cent on the five-year February average of 766.
Insolvencies rose 114 per cent to 62 in WA, while Queensland jumped 122 per cent to 273.
"This data indicates that in Queensland and WA the thriving mining sector is drawing oxygen from the non-mining sectors of the economy," Taylor Woodings said.
In Western Australia, non-mining businesses were struggling to attract staff with technical skills while mining businesses were inflating labour costs across all sectors.
Also, many non-mining businesses faced falling valuations and earnings outlooks, and the flat property market was affecting their ability to borrow.
In Queensland, the record number of insolvencies was largely a result of the "distressed" commercial and coastal property market and the increased appointments of receivers by secured creditors.
Furthermore, the depressed building sector was generating a flow-on effect to almost all parts of Queensland's economy.
Taylor Woodings said the February figures were an early indication that during calendar 2012, the number of insolvencies were likely to remain at GFC levels.
"March typically records a marked increase in insolvency figures," Taylor Woodings said.
"Next month's figures will be an important indicator for the remainder of the year."