CreditorWatch has found that despite rates and inflation increases, business activity has returned to pre-Covid levels.
CreditorWatch has released its March 2023 CreditorWatch Business Risk Index (BRI). The research suggests that, on multiple indicators and despite rates and inflation increases, business activity has returned to pre-Covid levels.
Average trade receivables for March are sitting at $122,223, just eight percent below the March 2020 figure. B2B trade receivables are up 45 percent year-on-year, and B2B trade payment defaults are up 20 percent YoY.
CreditorWatch Chief Economist, Anneke Thompson, says this increase can partly attributed to high workloads that many industries are still dealing with. “The construction industry, in particular, is still working through very high volumes of work and is invoicing at a very high rate,” she said. “It is the cost side that is really damaging to this sector at the moment, with many projects being completed at a substantial financial loss to the builder due to the price the owner pays being fixed at the time of contract signing.”
Construction recorded the highest month-on-month increase in business turnover at 4.6 percent.
CreditorWatch identified credit enquiries as another indicator of the rising level of business activity, which rose 28 percent from February to March and is up 149 percent on last year. Court actions are similarly experiencing growth, up 22 percent YoY, bringing them back to pre-Covid levels, even above March 2020 by 1.5 percent.
Patrick Coghlan, CreditorWatch CEO, says the increase in business activity in March is testament to the resilience of the Australian business community.
“From a pandemic to labour shortages, supply chain disruptions, high inflation and rising interest rates, Australian businesses have had it all thrown at them,” he says. “To now be registering these increases in turnover is a very encouraging sign. However, we can’t ignore the forecasts for more tough times ahead as demand drops and cost pressures remain.
“However, these current increases in turnover mean that businesses will thankfully be in a stronger position as conditions tighten.”
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