Latest news with #PatrickCoghlan
Yahoo
9 hours ago
- Business
- Yahoo
Sign of life for Aussie economy
The worst could be over for struggling businesses in the hospitality and construction sectors, as the number of insolvencies dropped in May. Two key measures of business stress – insolvencies and business-to-business payment defaults – are easing, CreditorWatch data shows. Overall, insolvencies are down 0.9 per cent from April to May and have now dropped 12 per cent from their November peak, while business-to-business payment defaults dipped 11.8 per cent in May and are down 18.3 per cent from their peak in December. The major falls were in the discretionary facing sectors, including hospitality and construction. The falls come as the same pressures impacting households – inflation, higher interest rates and taxes – begin to ease on businesses. CreditorWatch chief executive Patrick Coghlan said insolvencies and trade payment defaults had levelled out, albeit at quite elevated levels, suggesting some of the pressures on businesses from higher costs and constrained consumer spending may be beginning to be balanced out. But he warned that businesses, particularly in the hospitality sectors, are still struggling to pass on higher input costs to customers. 'This levelling off of insolvencies has been long awaited and is very welcome, but we need to remember that several industries still face significant challenges, particularly those exposed to discretionary spending,' Mr Coghlan said. 'If the price of a sandwich at a cafe goes up by three or $4, people can very easily go elsewhere or bring their lunch from home.' The decline in hospitality businesses facing insolvency follows CreditorWatch data back in October 2024 that showed one in six businesses were rated at high risk of collapsing. The turnaround follows several tailwinds for these consumer facing businesses, including two interest rate cuts from the Reserve Bank since February, lower taxes for households starting in July 2024 as well as a further lifting in the minimum wage from July 1. CreditorWatch chief economist Ivan Colhoun said this increase in payments would come with mixed reactions from businesses in the hospitality sector. 'The good thing is that we will likely see these funds recycled into the economy,' he said. 'Interest rate relief by the RBA, as inflation has moderated, should also improve cash flow a little for both consumers and businesses alike. '(But) the Fair Work Commission's decision to increase the national minimum wage from 1 July 2025 will benefit consumers but apply further pressure on businesses, particularly in retail and hospitality.'
Perth Now
10 hours ago
- Business
- Perth Now
Sign of life for Aussie economy
The worst could be over for struggling businesses in the hospitality and construction sectors, as the number of insolvencies dropped in May. Two key measures of business stress – insolvencies and business-to-business payment defaults – are easing, CreditorWatch data shows. Overall, insolvencies are down 0.9 per cent from April to May and have now dropped 12 per cent from their November peak, while business-to-business payment defaults dipped 11.8 per cent in May and are down 18.3 per cent from their peak in December. Insolvencies have fallen in the hospitality sector. NewsWire / Luis Enrique Ascui Credit: News Corp Australia The major falls were in the discretionary facing sectors, including hospitality and construction. The falls come as the same pressures impacting households – inflation, higher interest rates and taxes – begin to ease on businesses. CreditorWatch chief executive Patrick Coghlan said insolvencies and trade payment defaults had levelled out, albeit at quite elevated levels, suggesting some of the pressures on businesses from higher costs and constrained consumer spending may be beginning to be balanced out. The number of businesses facing insolvency is falling, albeit from a high level. Supplied Credit: Supplied But he warned that businesses, particularly in the hospitality sectors, are still struggling to pass on higher input costs to customers. 'This levelling off of insolvencies has been long awaited and is very welcome, but we need to remember that several industries still face significant challenges, particularly those exposed to discretionary spending,' Mr Coghlan said. 'If the price of a sandwich at a cafe goes up by three or $4, people can very easily go elsewhere or bring their lunch from home.' There are signs Australians are beginning to return to the shops. NewsWire / John Appleyard Credit: News Corp Australia The decline in hospitality businesses facing insolvency follows CreditorWatch data back in October 2024 that showed one in six businesses were rated at high risk of collapsing. The turnaround follows several tailwinds for these consumer facing businesses, including two interest rate cuts from the Reserve Bank since February, lower taxes for households starting in July 2024 as well as a further lifting in the minimum wage from July 1. CreditorWatch chief economist Ivan Colhoun said this increase in payments would come with mixed reactions from businesses in the hospitality sector. 'The good thing is that we will likely see these funds recycled into the economy,' he said. 'Interest rate relief by the RBA, as inflation has moderated, should also improve cash flow a little for both consumers and businesses alike. '(But) the Fair Work Commission's decision to increase the national minimum wage from 1 July 2025 will benefit consumers but apply further pressure on businesses, particularly in retail and hospitality.'
News.com.au
10 hours ago
- Business
- News.com.au
‘Very welcome': Business insolvencies fall
The worst could be over for struggling businesses in the hospitality and construction sectors, as the number of insolvencies dropped in May. Two key measures of business stress – insolvencies and business-to-business payment defaults – are easing, CreditorWatch data shows. Overall, insolvencies are down 0.9 per cent from April to May and have now dropped 12 per cent from their November peak, while business-to-business payment defaults dipped 11.8 per cent in May and are down 18.3 per cent from their peak in December. The major falls were in the discretionary facing sectors, including hospitality and construction. The falls come as the same pressures impacting households – inflation, higher interest rates and taxes – begin to ease on businesses. CreditorWatch chief executive Patrick Coghlan said insolvencies and trade payment defaults had levelled out, albeit at quite elevated levels, suggesting some of the pressures on businesses from higher costs and constrained consumer spending may be beginning to be balanced out. But he warned that businesses, particularly in the hospitality sectors, are still struggling to pass on higher input costs to customers. 'This levelling off of insolvencies has been long awaited and is very welcome, but we need to remember that several industries still face significant challenges, particularly those exposed to discretionary spending,' Mr Coghlan said. 'If the price of a sandwich at a cafe goes up by three or $4, people can very easily go elsewhere or bring their lunch from home.' The decline in hospitality businesses facing insolvency follows CreditorWatch data back in October 2024 that showed one in six businesses were rated at high risk of collapsing. The turnaround follows several tailwinds for these consumer facing businesses, including two interest rate cuts from the Reserve Bank since February, lower taxes for households starting in July 2024 as well as a further lifting in the minimum wage from July 1. CreditorWatch chief economist Ivan Colhoun said this increase in payments would come with mixed reactions from businesses in the hospitality sector. 'The good thing is that we will likely see these funds recycled into the economy,' he said. 'Interest rate relief by the RBA, as inflation has moderated, should also improve cash flow a little for both consumers and businesses alike. '(But) the Fair Work Commission's decision to increase the national minimum wage from 1 July 2025 will benefit consumers but apply further pressure on businesses, particularly in retail and hospitality.'
West Australian
a day ago
- Business
- West Australian
Perth tipped to have second-lowest rate of businesses going bust over the next year, says CreditorWatch
Perth is tipped to have the second-lowest rate of business failures among the capital cities over the next 12 months, as new figures from credit analysts CreditorWatch hint at a brighter outlook. Adelaide leads the pack, with the city expected to have the lowest rate of businesses going bust over the next year, at 5.15 per cent. It was followed by Perth with a forecast failure rate of 5.2 per cent, then Melbourne (5.81 per cent), Brisbane (5.83 per cent), and Sydney (6.2 per cent). Fresh data from CreditorWatch, to be released on Wednesday, also showed an easing in two key measures of business stress in May. Insolvencies have stabilised to be down 0.9 per cent from April to May, and have now dropped 12 per cent from their peak in November. Meanwhile, business-to-business payment defaults dipped 11.8 per cent in May and were down 18.3 per cent from their December peak. CreditorWatch said the drops suggested the stage three tax cuts — which came into effect last July — as well as the recent interest rate cuts from the Reserve Bank of Australia, slowing inflation and fiscal support measures were beginning to alleviate some pressures on Australian businesses. But CreditorWatch chief executive Patrick Coghlan warned some sectors remained under pressure, with rising insolvencies being recorded in healthcare and social assistance, retail, transportation, hiring and real estate. Easing insolvency trends were evident in hospitality and construction, which were previously the most challenged sectors. 'Post-COVID, we've seen inflation hit 30-year highs. Those rapid price increases across the economy don't reverse when the inflation rate comes down again,' Mr Coghlan said, adding higher prices were locked in and remained as permanent pressures for businesses. '(Higher prices are) generally passed on to consumers, but this is very difficult for businesses in sectors such as hospitality. 'We won't see conditions improve sustainably for businesses in discretionary sectors until consumers see their wages grow ahead of costs for some time.' CreditorWatch chief economist Ivan Colhoun said the Fair Work Commission's decision to give the country's lowest paid workers a pay bump of 3.5 per cent from $24.10 to $24.94 per hour would benefit consumers, but applied further pressure on businesses — particularly those in the retail and hospitality sectors. 'The good thing is that we will likely see these funds recycled into the economy,' he said. 'Interest rate relief by the RBA, as inflation has moderated, should also improve cash flow a little for both consumers and businesses alike.' Gosnells in Perth's south-east is expected to have the highest rate of business failures in WA over the next year, with 7.2 per cent of businesses in the suburb predicted to close down. It was followed by Rockingham with a default rate of about 7 per cent. WA Insolvency Solutions last week warned the State looked set for a surge in business collapses as the Australian Taxation Office clamps down on ageing debts.
