The latest insolvency statistics from the Australian Securities and Investments Commission indicate that the mining industry shake-out appears to be slowing, with a significant decline in insolvencies in recent months for the industry compared with 2016.
Only five mining companies registered insolvencies in September and 14 in October, this compares to 28 in September 2016, and 19 in October of that year.
The recent results are also a long way from the peak of 106 recorded in April last year.
FTI Consulting senior managing director Ross Blakely said other industries were still struggling.
“While some industries may have seen the worst of their challenges, such as mining and mining services, there are still a number of sectors, such as retail and construction, and pockets such as hospitality and abattoirs, that are showing signs of stress,” he said
“Anecdotally we are hearing that the revenue and margins just aren’t there, with considerable competition and rising costs.”
The statistics also suggest that conditions for manufacturers have improved, with 13 appointments in September and 18 in October, compared with 24 and 30 in the same months last year respectively. It also improved from the previous corresponding quarter, with 57 appointments compared with 86 in 2016.
Overall, in September, 627 companies entered external administration, down from the 741 recorded in August 2017.
This fall represents a 12.4 per cent year-on-year decline, with 716 insolvency administration appointments recorded in the same month of 2016.
Overall the figures show a decline from the levels seen mid this year and in the same period of 2016, however Mr Blakely said there was still cause for concern.
“While the figures reflect a continued downward trend in the number of companies entering external administration, which is positive, in reality there is still a fair bit of stress among businesses, and many remain at risk,” he said.
There were mixed results across the past two months in Western Australia, with a decline in insolvencies in September but a rise for October.
In September 2016, WA had 89 insolvencies but this year that was figure was down to only 54.
WA had 54 insolvencies in October 2016, however in 2017 that number rose to 79.
