Insolvency rates for businesses overall have returned to long-run averages but remain elevated in certain industries, according to a report by the central bank.
The Reserve Bank of Australia’s latest Financial Stability Review indicates that total company insolvencies as a share of operating companies have stabilised over the past year, returning to their long-run averages.
The RBA report said that easing cash flow pressures and recovering domestic demand have supported company viability.
It noted that insolvencies saw a sharp increase in the years following the pandemic due to a catch-up effect from the exceptionally low number of insolvencies during the COVID-19…