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Crippling interest rates and sky-high prices of everyday items, from a bag of concrete to a cup of coffee, are behind record business insolvencies in Australia, research shows.
The collapsing outlook for business, especially small companies, has been highlighted in CreditorWatch's business risk index.
In the year to May, insolvencies reached a record high of 1378, a 38 per cent increase in the rate of business failures.
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Electricity, gas, water and waste services topped the list of industries by rate of increase in insolvencies, with an 89 per cent increase year-on-year, followed by education and training (87 per cent) and mining (72 per cent).
Information, media and telecommunications was the only industry sector to report an improvement in the rate of insolvencies, with a drop of 2 per cent.
The credit reporting agency survey also found the food and beverage services sector was the most vulnerable industry, with a 7.54 per cent failure rate, ahead of administrative and support services (5.43 per cent) and arts and recreation services (5.40 per cent).
The construction industry had the highest proportion of late payments, with 10.46 per cent of businesses having payments that are 60 or more days overdue.
Stubborn inflation and consecutive interest rate increases had convinced consumers at all income levels to reduce spending, said CreditorWatch's chief executive Patrick Coghlan.
"We don't expect a meaningful turnaround in consumer confidence until the impact of at least two rate cuts has been felt, which won't be until well into 2025," he said.
