The number of liquidations for the three months ended January 2012 decreased by 6.2 percent year-on-year (y/y) in South Africa, according to a report.
The number of liquidations for the three months ended January 2012 decreased by 6.2 percent year-on-year (y/y) in South Africa according to a report.
According to Statistics South Africa (Stats SA), the number of liquidations for January 2012 decreased by 36.1 percent y/y.
The y/y decline in the number of liquidations for January 2012 was due to a 48.1 percent decrease in the number of voluntary liquidations.
Company liquidations decreased by 37.8 percent while close corporation liquidations decreased by 34.4 percent over this period.
In January 2012, the largest y/y decrease related to businesses in the community, social and personal services industry, which recorded 47 fewer liquidations.
This was followed by the wholesale and retail trade, catering and accommodation industry (34 fewer liquidations) and the financing, insurance, real estate, business services industry (24 fewer liquidations).
The number of insolvencies for 2011 decreased by 28.6 percent y/y and there was a 17.2 percent decrease in the number of insolvencies in Q4 2011 compared with Q3 of 2010.
A y/y decrease of 17.2 percent was estimated for December 2011, notes the report.
Sibusiso Gumbi, Standard Bank Home Loans research analyst, says the figures hint at improving consumer creditworthiness and is largely in line with trends in the number of civil summonses and judgements recorded for debt.
Gumbi points out that although consumer creditworthiness appears to be improving, it still faces challenging macroeconomic conditions.
He explains that while developments are encouraging for overall consumer creditworthiness, household balance sheets still need bolstering.
“Household debt remains sizeable, which could rein in household credit uptake and similarly, the uptake in mortgage loans.”
Gumbi adds that the residential property market is unlikely to see interest rate stimulus and Standard Bank forecasts that the repo rate will remain unchanged at 5.5 percent in 2012. – Denise Mhlanga
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