BWA Insolvency
Quarterly Market Report: Q4 2023
In our latest quarterly insolvency data, a deceptive calm prevails. The holiday period is traditionally a quiet season for insolvencies, and the levelling out of insolvency figures for Q4 2023 reflects this. Whether we should take this as a sign of stability, or as a calm before challenging times ahead remains to be seen when the next round of data is released for Q1 2024.
There has been a flatlining of overall insolvencies for the period October 1st to December 31st 2023. Compared to Q3 2023, insolvencies have decreased by 7% and compared to the same period last year have decreased by 1%. While these statistics look promising on paper, they should not be taken as an indication of a settling of the market. It is more likely a reflection of business owners sitting on their hands during December with the hope that the holiday season brings an influx of funds – particularly in the retail and food and beverage sectors, always popular over the holidays.
Diving deeper into the data shows that the construction industry continues to navigate turbulent waters, with insolvency figures remaining high.
This quarter there were 131 insolvencies within the construction sector, a slight increase from 130 in the previous quarter and up from 123 in the corresponding period last year, underscoring the persistent challenges this sector faces.
Good news for tourism
On a brighter note, the accommodation and tourism sectors are looking more optimistic as New Zealand welcomes back healthy tourism numbers. The accommodation sector saw a notable decrease to just two insolvencies this quarter, a drop from seven in the preceding period, while the tourism sector experienced a marginal increase to three, from just two in the last quarter.
These figures highlight a cautiously optimistic outlook for these sectors, suggesting that while the construction industry grapples with its ongoing trials, accommodation and tourism might be beginning to find their foothold in a post-pandemic recovery.
Industry Spotlight: Tourism & accommodation
This quarter has seen a decline in insolvencies among businesses operating under the accommodation umbrella, both quarterly and year-on-year. This sector encompasses an array of business types that provide lodging, from hotels and B&Bs to boarding houses, caravan parks, and ski lodges.
It is promising to see this drop, which hopefully marks a turnaround for a sector that has been beleaguered by the dual impacts of diminished tourism and constrained consumer spending.
On the tourism front, some stabilisation seems to have occurred. There has been only one additional insolvent circumstance in Q4 compared to Q3. This contrasts with five more insolvencies in Q4 2022, signalling cautious optimism for the tourism industry.
The BWA Insolvency Quarterly Market Report. BWA Insolvency has been tracking the data on liquidations, receiverships and voluntary administrations since 2012. The Registrar of Companies Office records the filings of companies that have gone into a formal state of insolvency. BWA then does a deeper investigation into each company and categorises them to show trends across different industries and regions.
