Fifty percent spike in firms liquidated in SA

STATISTICS SA has revealed a gloomy picture of a nearly 50% spike in the number of businesses that have been thrown into liquidation, a situation blamed squarely on the Covid-19 related lockdown.

The total number of liquidations increased by 49.0% (71 more cases) in March this year, compared with March last year (before the outbreak of the pandemic and the resultant hard lockdown), according to figures released this week.

While voluntary liquidations rocketed by 61 cases, compulsory liquidations spiked by 10 cases.

The total number of liquidations rose by 18.9% in last year's first quarter, compared with the first quarter of 2020.

The hardest hit industries included manufacturing, construction, trade, catering and accommodation, financing, real estate, insurance, business services, community, personal, and social services.

The agriculture, hunting, forestry and fishing sectors were reported as the least affected, with only three liquidations noted in March this year, as compared to zero in the same period last year.

The estimated number of insolvencies were down by 60.2% in February 2021, compared with the same period last year, while a 26.9% decline was estimated in the three months ended February 2021, compared with the three months ended February last year.

Seasonally, adjusted insolvencies decreased by 43.4% in February this year, compared with January, the report on Liquidations and Insolvencies found.

“This followed month-on-month changes of -40.2% in January 2021 and 10.4% in December 2020,” says the report.