The total number of liquidations increased by 1,1% year-on-year (y/y) to 265 in May 2005 after rising by 14,3% y/y to 279 in April 2005, Statistics South Africa said on Thursday.
The y/y comparisons are distorted to a certain extent by the fact that Easter this year took place in March compared with April last year. In March 2004 there were 301 liquidations followed by 244 in April, while in 2005 there were 240 in March and 279 in April. The record monthly total of 511 was reached in August 2000.
The total number of liquidations recorded for the three months ended in May 2005 decreased by 11% (from 881 to 784) compared with the previous three months.
The decrease of 11% in the total number of liquidations for the three months ended in 2005 compared with the previous three months was due to a decrease of 18% (from 139 to 114) in compulsory liquidations.
The increase of 1,1% in the total number of liquidations for May 2005 compared with May 2004 was due to an increase of 64,9% (from 37 to 61) in compulsory liquidations.
The total number of liquidations in the fourth quarter of 2004 fell by 26,3% from the third quarter of 2004. The decrease of 26,3% in the total number of liquidations for the fourth quarter of 2004 compared with third quarter of 2003 was due to a decline of 44,7% (from 190 to 105) in compulsory liquidations and a 21,9% drop (from 798 to 623) in voluntary liquidations.
The total number of liquidations recorded for 2004 was 3 510, a 14,1% decline on the 2003 total of 4 086.
The 14,1% decline was due to a decrease of 34,2% (from 857 to 564) in compulsory liquidations and a drop of 8,8% (from 3 229 to 2 946) in voluntary liquidations.
The total number of insolvencies for April 2005 continued to show more than 50% y/y decline with a 51,7% y/y drop to 101, the lowest in at least six years, after March’s 54,7% y/y plunge to 107. The record monthly total of 604 was set in August 1999.
The March decline brought the drop for the first quarter to 37,6% y/y to 322 and was down 8,8% when compared with the fourth quarter of 2004.
The total number of insolvencies recorded for 2004 was 1,697, a 34,3% decline on the 2003 total of 2 584, which in turn was a 14,4% drop on 2002. The record annual total was 6 013 reached in 1999, so the 2004 total was 71,8% below this.
The reduction in insolvencies is in part due to five cuts in interest rates implemented in 2003 after four hikes in 2002.
On August 12 2004, the South African Reserve Bank announced a 50 basis
points cut and on April 14 2005 it announced a further 50 basis points cut. – I-Net Bridge