Fewer company closures another good sign for economy

There is another sign that the SA economy is escaping from the recession, and times are getting better for industry and commerce in general, according to Luke Doig, senior economist at Credit Guarantee Insurance Corporation (CGIC). “The October 2009 closures of companies and closed corporations fell 17.5%, which extends the positive trend witnessed over the past few months,” he told FTW. “This with the three month period to October 2009 exhibiting a 13.4% fall in the number of failed companies, compared to the three months ended July 2009. “This amelioration has brought the year-to-date increase, compared to the first ten months of 2008, to 20.3%, which is substantially down on the 47% higher level recorded comparing the first quarter of 2009 to the first quarter of 2008.” From a sectoral point of view: manufacturing showed a 35.3% improvement, with 11 failures in October 2009 compared to the previous year’s level of 17; construction was flat with 24 liquidations; wholesale and retail experienced 29% fewer closures (80 vs 113 a year earlier); and financing, insurance and business services exhibited an 18.7% recovery (150 down to 122).