Data from Stats SA reveals that in November, 144 businesses ceased operating, bringing the total to over 1,500 companies that have closed in 2023.
Stats SA indicated that out of the total, 131 businesses chose to close down voluntarily, while 13 were obliged to.
This implies that since the beginning of the year, 1,520 businesses have gone through liquidation. However, there was a 13.4% decrease in the number of liquidations in October 2023 compared to October 2022.
Also, the figure for liquidations fell by 11.6% in the three months leading up to November 2023 compared to the corresponding period in 2022.
Finally, there was a 13.3% decrease in the total number of liquidations in November 2023 when compared to November 2022.
Regarding industry-specific data, the finance, insurance, real estate, and business services industry experienced the most liquidations in November, with 44 businesses ceasing operations. This brought this sector’s liquidation total to 507 for the year, the highest among all industries.
Following this, the Unclassified industry saw 40 liquidations in November, trailed by the trade, catering, and accommodation industry with 30, and the community, social, and personal services sector with 14 liquidations.
Even though there was a year-on-year decrease in liquidations, various economic indicators suggest that November was a challenging month.
For example, Mining output has decreased by 1.3% year-to-date, which, although not as significant as the 7.1% drop experienced in 2022, is still a decline.
Furthermore, negative growth was reported in seven out of the ten manufacturing divisions, with the food and beverages division contributing the most to this downturn, at -3.5%, which equates to a -0.8 percentage point contribution.
Strained global conditions and major domestic challenges affected the manufacturing sector activity and export potential during October.
Naamsa reports that the new vehicle market experienced its most significant losses in November since the beginning of 2021 when it was just starting to recover from the COVID-19 pandemic.
However, there was some encouraging news, as headline consumer inflation dropped in November after increasing for three consecutive months. Stats SA data shows that headline consumer inflation fell to 5.5% in November from 5.9% in October.
The monthly decline was primarily due to a 5.5% decrease in the fuel price index, resulting in the annual rate for fuel dropping from 11.2% in October to 1.8% in November.
On the other hand, the food and non-alcoholic beverages segment witnessed an increase, reaching a four-month high of 9.0%. In November, meat inflation also increased marginally by 0.1%, settling at 3.5%.
“The outbreak of avian flu continued to disrupt the poultry market. The annual rate for IQF (individual quick frozen) chicken was 7.3% in November, up from 5.5% in October,” Stats SA said.
