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South Africa kisses over 1,600 businesses goodbye
The latest liquidation numbers from Stats SA show that over 1,600 businesses closed their doors in 2023, but this marks a significant reduction from 2022.
In December 2023, 137 businesses closed down – 135 voluntarily so and five on a compulsory basis.
This took the overall number of liquidations to 1,657 across the whole year – 200 on a compulsory basis and 1,457 on a voluntary basis.
However, the number of liquidations decreased by 13.1% compared to 2022.
Liquidations of companies decreased by 15.6% (from 1,091 to 921), while the liquidations of closed corporations decreased by 9.8% (from 816 to 736).
The total number of liquidations decreased by 13.5% in Q4 2023 compared with Q4 2022.
In December, there was also a 13.8% year-on-year decrease.
Source: Stats SA 
Source: Stats SA Looking on a per-industry basis, the financing, insurance, real estate and business services industry saw the most liquidations in 2023, with 554 in total.
This was followed by the unclassified (465) and trade, catering and accommodation (318) industries.
The electricity, gas and water industries were the least affected, with only three liquidations over the year.
Mixed messages
The decline in liquidations comes amid a flurry of mixed economic data.
The BankservAfrica Economic Transactions Index (BETI) increased by 1.9% to reach an index level of 133.0 in December.
However, independent economist Elize Kruger said the BETI was still 0.5% lower than the September 2023 print, signalling a strained economy in Q4.
“With a quarterly contraction in real GDP already recorded in Q3 – anticipated in previous BETI reports – there is a slight possibility that the economy could have dipped into a technical recession in Q4,” BankservAfrica said.
Other nowcast indicators were also muted, with the S&P Global South Africa Purchasing Managers’ Index (PMI) dropping from 50.0 in November to 49.0 in December due to Transnet’s port crisis.
Although the ABSA PMI increased from 8.2 in November to 50.9 in December, the increase was due to the lengthening of supplier delivery times, which typically implies more robust demand and not delays from suppliers.
New vehicle sales also dropped in December – the fifth month in a row – with full-year sales of only 0.5% in 2023 compared to 2022 and still below pre-Covid levels.
However, looking more positively, mining production jumped from 3.6% in October to 6.8% in November – ahead of the consensus of 3.0% y/y from the Reuters poll.
“The sustained monthly momentum indicates a positive contribution to 4Q23 GDP growth. It aligns with our view that GDP likely rebounded in 4Q23 following a 0.2% q/q decline in 3Q23,” Thanda Sithole, FNB Senior Economist, said.
source:South Africa kisses over 1,600 businesses goodbye – BusinessTech
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