The number of company insolvencies is on the rise and may soon start putting pressure on the jobs market.
Monthly insolvency data published by ASIC shows insolvencies have risen from an annualised rate of 0.4 per cent of businesses at the start of the year to 0.5 per cent over the past three months.
According to Westpac modelling — which seasonally adjusts the data, stripping out regular annual variations allowing for better comparisons over time and across states — the latest figures equate to around 880 insolvencies a quarter compared to 750 earlier in the year.
“The rise takes the insolvency rate from the slightly below-average readings seen in 2014 to above-average readings on a par with those seen between 2011 and 2013,” Westpac economist Matthew Hassan said.
“With new hiring still very uneven, a near term increase in labour shedding is likely to see the unemployment rate track higher over the next few months.
“We continue to expect a further modest rise with the unemployment rate forecast to push up to 6.5 per cent by the end of the year.”
The next set of jobs figures will be released by the Australian Bureau of Statistics on Thursday, with the market forecasting a slight drop in unemployment from 6.3 per cent to 6.2 per cent and the creation of 10,000 jobs.
On Westpac’s analysis, the most pronounced increase in company failures have been in mining states — Queensland in particular — although failure rates have been rising in non-mining states as well.
Separate data released by the Australian Financial Security Agency shows personal bankruptcies remain near historical lows, running at just under 7,000 in the June quarter, an annualised bankruptcy rate of 0.14 per cent of the working age population and well below the long-run average of 0.18 per cent.
“While low bankruptcy rates underscore the stable consumer picture, the lift in insolvencies suggests we may see a lift in labour shedding in coming months after a fairly benign period in 2014 and the first half of 2015,” Mr Hassan said.
“Personal bankruptcy rates remain below average across all states but may come under some upward pressure both from a rise in unemployment and weaker conditions in some housing markets, most notably Perth.”