B2B payment defaults jump 69.4%

Small businesses in the hospitality sector face the greatest risk of insolvency over the next 12 months, based on the latest Business Risk Index from CreditorWatch.
CreditorWatch calculated that 7.5% of SMEs in the food & beverage services sector might fail in the next year.
The other sectors with the greatest failure risk include administrative & support services (5.5%), arts & recreation services (5.4%), construction (5.1%) and transport, postal & warehousing (5.1%).
B2B payment defaults were 69.4% higher in April than the year before, with businesses struggling to pay their invoices, according to CreditorWatch. This reflects the challenging conditions and also exacerbates them because businesses that struggle to collect on payments find it harder to remain profitable.
“While Australia is far from being in a technical recession, and Treasury is still forecasting positive, albeit weak, GDP growth over the three-year outlook, business conditions will feel recessionary to most businesses that rely on consumer spending, particularly those businesses located in mortgage belt areas of our capital cities,” CreditorWatch chief economist Anneke Thompson said.