Categories: Business NewsEconomy
| On
2024-01-23 8:57 AM

Sharp Decline in Liquidations Marks Economic Resilience in South Africa

  • Decline in Liquidations: December 2023 witnessed a 13.1% drop in total liquidations, indicating economic stability and resilience.
  • Sector-wise Analysis: Industries like manufacturing and financing experienced significant decreases in liquidations, contributing to the positive trend.
  • Optimistic Outlook: Statistician-General Risenga Maluleke expressed optimism, citing the figures as encouraging signs for South Africa's economic recovery.
By Lethabo Ntsoane

Statistics South Africa (Stats SA) has released the latest data on liquidations, revealing a notable decrease in the number of liquidations for December 2023. The figures, released today, indicate a positive trend, suggesting economic resilience and stability in the country.

Key Highlights

1. Overall Decrease in Liquidations

The total number of liquidations witnessed a significant drop, declining by 13.1% in 2023 compared to the previous year. The decrease was more pronounced in company liquidations, which fell by 15.6% (from 1,091 to 921), and close corporations experienced a decrease of 9.8% (from 816 to 736).

2. Fourth Quarter Performance

The fourth quarter of 2023 saw a 13.5% reduction in total liquidations compared to the same period in 2022. Additionally, December 2023 alone saw a year-on-year decrease of 13.8%.

Number of Liquidations – A Closer Look

Figure 1: Number of Liquidations – December 2023

Sector-wise Analysis

1. Total Liquidations According to Industry (January-December 2023)

IndustryTotal Liquidations
Agriculture, hunting, forestry, fishing11
Mining and quarrying6
Manufacturing56
Electricity, gas, and water3
Construction78
Trade, catering, and accommodation318
Transport, storage, communication36
Financing, insurance, real estate554
Community, social, personal services130
Unclassified465

Table 1: Total Liquidations According to Industry

2. Liquidations of Companies and Close Corporations (January-December 2023)

IndustryCompaniesClose CorporationsTotal
Agriculture, hunting, forestry, fishing5611
Mining and quarrying426
Manufacturing193756
Electricity, gas, and water112
Construction195978
Trade, catering, and accommodation126192318
Transport, storage, communication122436
Financing, insurance, real estate286268554
Community, social, personal services3496130
Unclassified415321736

Table 2: Liquidations of Companies and Close Corporations

Positive Economic Signs

The decline in liquidations across various industries suggests positive economic signs. The financing, insurance, real estate, and business services sector, which traditionally faces high liquidation rates, saw a decrease of 15.4%.

Expert Commentary

Risenga Maluleke, Statistician-General, expressed optimism, stating, “The decrease in liquidations is an encouraging sign for the South African economy. While challenges persist, these figures indicate a level of resilience and stability, offering hope for sustained economic recovery.”

Conclusion

The latest statistics on liquidations in South Africa for December 2023 point towards a positive economic outlook. The notable decrease in liquidations across industries reflects a resilient economy, providing a glimmer of hope for continued recovery.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted: Email: lethabo@rateweb.co.za Twitter: @NtsoaneLethabo