Specialist firm highlights industries at risk
A specialist accounting and advisory firm has revealed the industries and regions that are most at risk of default within the next 12 months.
New research from SV Partners, included in the SV Partners Commercial Risk Outlook Report for August 2016, analysed industries throughout Australia and identified those most at risk of default over the course of the next 12 months.
According to the research, the top 5 industries nationally at risk of default within the next 12 months are:
- Professional, Scientific and Technical Services
- Retail Trade
- Accommodation and Food Services
- Transport, Postal and Warehousing
"Those main industries that have influence on the Australian economy including Construction, Professional, Scientific & Technical Services and Retail sectors are currently outlined as the highest risk categories from the quantity of businesses facing adverse events within the next 12 months," the report stated.
"On a national basis, there are 9 businesses in financial distress with annual turnover of more than $1 billion, with companies in the Manufacturing and Transport, Postal & Warehousing considered to be most at risk."
The research also indicated the top 5 locations where businesses are most at risk of default, according to the number of businesses:
- VIC: Melbourne Inner
- NSW: Sydney Inner South West
- NSW: Sydney City and Inner South
- QLD: Gold Coast
- NSW: Parramatta
"The main reasons for financial failure, according to the ASIC External Administrator’s Reports, are inadequate cash flow, poor strategic management and trading losses," said SV Partners, which urged businesses to review their business plans, stress test their budget and communicate with key stakeholders in an attempt to minimise risk.