Credit reporting agency CreditorWatch has warned that increased insolvency risks will remain in the Australian economy in the short to medium term despite the recovery of business activity from the COVID-19 pandemic.
In its business risk report for March 2022, CreditorWatch found that court actions reached their highest level since March 2021 and trade payment defaults were also at their highest point since 2020. These two factors indicated that insolvencies were on the rise.
“I remain cautious about the timeframe for trade activity to return to pre-COVID levels,” CreditorWatch CEO Patrick Coghlan said.
“There is still so much uncertainty out there, and with inflation on the rise and interest rate increases looming, consumers may be reluctant to open their wallets too much.”
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