Liquidations have generally declined in numbers this year, and, by all accounts, the logistics sector “is coping relatively well with the weak operating situation”, according to Luke Doig, senior economist of Credit Guarantee Insurance Corporation (CGIC). Stats SA liquidation data reveals that the total number of liquidations decreased by 9.6% in the first ten months of 2013 compared with the first ten months of 2012. Liquidations of close corporations decreased by 13.0% and liquidations of companies decreased by 5.7%. “We have been at pains in the past to highlight that business rescue cases are to a large extent behind this apparent improvement in the business environment,” Doig said. “This was starkly underscored by the weak 3rd quarter (Q3) gross domestic product (GDP) growth figure of 0.7% from 3.2% the previous quarter.” However, he did point out that the transport, storage and communication sector saw a Q3 growth rate of 2.6% from 1.5% in Q2. And, for the first nine months of the year, total GDP growth of 1.8% was achieved compared to the same period last year, while for transport sector output the corresponding figure was again higher at 1.9%. Further analysis of the figures showed 10 compulsory and 83 voluntary transport sector liquidations occurred in the first ten months of this year – 93 in total. “This was a whole 33% lower than in the same period last year,” Doig added. “As a proportion of total company closures, transport sector casualties have fallen from 6% in the first ten months of 2012 to 4.4% so far in 2013.” However, Doig cautioned that pressures were evident throughout the primary, secondary and tertiary sectors of the economy. “This means that any recovery will be muted and beset with challenges arising from labour relations, weak demand, cost pressures and tightening margins.” INSERT 1 83 The number of voluntary transport sector liquidations in the first ten months of this year. INSERT 2 9.6% The decrease in the total number of liquidations in the first ten months of 2013.
