October 2009 closures of companies and closed corporations fell 17.5%, which extends the positive trend witnessed over the past few months, 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 compared to the first quarter of 2008,” comments Luke Doig, Senior Economist at Credit Guarantee Insurance Corporation.
From a sectoral point of view: manufacturing showed a 35.3% improvement, with 11 failures in October 2009 compared to the previous year 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).
The South African Reserve Bank’s leading business cycle indicator continued its recovery with September recording a level of 114.6 from 112.5 in August. Hopefully, this will be reinforced when Stats SA releases the 2009 third quarter GDP figures that will show the domestic economy has started to escape from recession.
“We at Credit Guarantee can confirm the upward trend, recording a stabilisation of the number of reported companies delaying payments to creditors and consequently the number of companies being placed into liquidation,” says Doig. “In time, this will have a positive influence on curbing the number of jobs lost and the potential for the possible ‘re-employment’ of laid-off labour or even, more hopefully, for the creation of new job opportunities.”
Issued on behalf of:
Credit Guarantee Insurance Corporation of Africa Limited
Contact: Roger Munitich, General Manager - Marketing and R&D
Tel (011) 889-7327
Fax (011) 686-9627
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For further information:
Corporate Communications Consultants (Pty) Limited
Contact: Loraine Harris
Tel: (011) 783 8926 or 084 244 0510
About Credit Guarantee:
Credit Guarantee Insurance Corporation of Africa Limited, registered in 1956, is the largest (by premium income) and leading (80% market share) South African underwriting company operating in the field of debtors insurance. Credit Guarantee is a subsidiary of listed company, Mutual & Federal which owns 51% of the company, ultimately making it part of the Old Mutual Group.
Credit Guarantee's major business is the insurance of domestic (local) and export payment risks where its client companies sell to other companies on credit terms.
Credit Guarantee’s unique strength lies in its ability to secure a vast store of confidential information and market intelligence from a network of contacts and to interpret this data to support the business of its clients - in both local and international markets.
It is ISO 9001/2000 compliant across all aspects of its operations and sports an AA+ (double ‘A’ plus) rating from Global Credit Ratings Company.
