Level of financial stress among Townsville traders down
A RISK analysis has found a low level of financial difficulty among Townsville businesses, raising hopes the region has turned the corner after three years of painful contraction.
The SV Partners Commercial Risk Outlook Report found 1.8 per cent of Townsville businesses – 62 out of 3492 – are at high to severe financial risk over the next 12 months. This compares with percentages in the southeast corner, including Brisbane, as high as 3.7 per cent.
SV Partners executive di- rector David Stimpson said the result was a good sign for Townsville.
“Townsville has had a patchy economy for some time,” he said. “We’re hoping this report shows the local economy has turned the corner. Current infrastructure projects, like the new stadium, have given local industry a much- needed boost.
“Local businesses that rely on discretionary spending benefit from the flow- on effects of projects like this.”
Previously, local economists AEC Group has found the city has endured recession for the past three years with major projects providing the potential for a turnaround during 2017 and 2018.
Of the Townsville region’s 62 firms found to be in high to severe risk, three are major businesses with turnover between $ 10 million and $ 50 million, while 39 are businesses with revenues between $ 1 million and $ 10 million.
Sectors with high to severe risk at Townsville included construction ( 12 businesses), professional, scientific and technical services ( 9), accommodation and food services ( 8), retail trade ( 6), financial and insurance services ( 4) and wholesale trade ( 4).
The SV Partners analysis draws upon millions of commercially sourced records and data assets to create and analyse comprehensive risk profiles of more than half a million of Australia’s incorporated businesses.
On a state level, 2.9 per cent of Queensland businesses were revealed to be at high risk with accommodation and food services the industry with the highest proportion of high risk businesses.
Sectors with low numbers of businesses at high risk ( 0.7 per cent and 1.4 per cent) included agriculture, forestry and fishing, health care and social assistance industries.
Nationally, the report showed upward of 12,000 or 2.5 per cent of businesses measured are at high risk of collapse in the coming year.
The most at risk industries were revealed to be accommodation and food services ( 6.7 per cent), public administration and safety ( 3.1 per cent) and retail ( 3 per cent) which make up over 3000 businesses Australia wide.
Mr Stimpson said building resilience into a business was about managing costs, guaranteeing revenue streams and ensuring a business’s capital structure and leveraging was effective.