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Over 400 businesses have liquidated in South Africa so far this 2023.
The latest March 2023 statistics of liquidations provided by Stats SA showed that over the course of the third month of the year, there were 168 liquidations.
When compared to March 2022, the year before, there was a 7.7% decrease in the number of liquidations this year.
“Liquidations of companies decreased by 33 cases, while liquidations of close corporations increased by 19 cases during this period,” said Stats SA.
“The total number of liquidations decreased by 11.0% in the first quarter of 2023 compared with the first quarter of 2022,” it added.
So far this year, March had the highest number of liquidations, with February in second at 162 and January following with 81.
The graph below shows the number of liquidations since January 2013:
Finance, insurance, real estate and business services were the most heavily affected industry for the third consecutive month this year, with a total of 61 liquidations in March alone.
Unclassified industries followed suit with 43 liquidations, while the trade, catering and accommodation industry further reported 34 liquidations in March.
The electricity, gas and water industry was the only listed industry with no liquidations while the agriculture, hunting and forestry industries, as well as mining and transport, all saw just one case of liquidation each.
On top of those, businesses are having to fork out more money every month to keep the lights on operations underway amid intensifying load shedding.
According to financial service firm Deloitte, headline inflation increased from 6.9% in January to 7% in February 2023 and unexpectedly rose again to 7.1% in March.
High food prices, which rose 14% year on year in March due to the ongoing load-shedding pressure, are primarily responsible for the inflation hike, said the company.
On 7 March, the International Monetary Fund reported that the country’s economy declined more than expected in the final quarter of 2022, with GDP declining by 1.3% – economists anticipated a vastly different figure at 0.4%.
Within the final quarter of 2022, the currently most liquidated industry, he finance, real estate & business services industry, shrank by 2.3% on the back of low economic activity in financial intermediation, insurance and pension funding and auxiliary activities.
Looming strikes are also likely to have dire consequences on businesses that cannot handle increasing wage demands.
Read: Its not all doom and gloom for South Africa, say investors
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