Corporate insolvencies head higher
National insolvencies are still rising.
Contrasting with the relative stability in the unemployment rate to date, national corporate insolvencies continue to trend higher, reaching their highest level since 2015 in August.
By industry, construction insolvencies remain the stand-out, where builders have been squeezed by fixed-price contracts on existing projects and reduced demand for new work.
Relatively high interest rates on corporate loans - about 5½% on average for large businesses and 6½-7¼% for small- and medium-sized companies - and weak economic growth should see insolvencies trend higher next year.
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Based in Sydney, Kieran Davies is Chief Macro Strategist at Coolabah Capital Investments, an asset manager with 40 executives and over $8 billion in fixed-income strategies. Kieran is responsible for macroeconomic research and investment strategy, contributing to the investment decisions of the firm. Kieran has long experience as a macroeconomist in both the private and public sectors. He has worked most recently as Chief Markets Economist for National Australia Bank and was previously Chief Economist, Australia and New Zealand, for Barclays Bank and ABN Amro Bank/RBS. Kieran also worked as Principal Adviser on the macroeconomy and budget policy in the Commonwealth Treasury and Director of Forecasting.
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