Economic recap
The OCR continues its march on an upwards trajectory, with the latest Reserve Bank rise of 75 basis points to 4.25 and a supporting narrative outlining future raises in 2023 of up to 125 basis points to bring the OCR to 5.0 and over.
From an economic perspective there continue to be a number of factors affecting businesses. The labour crunch remains with immigration not making up for the continued brain drain as people leave on OE’s or delayed travel plans. Shipping and product delays continue with China’s lockdowns as they struggle to grapple with a continued covid outbreak. On the construction front while councils continue to catch up on the backlog of buildings consents keeping the monthly consent numbers at elevated levels. The vibe from people on the ground however is that 2023 is looking like a slower year moving forward, no doubt a number of the issued consents may lapse incomplete.
ANZ business confidence can be detailed quite simply with their own blurb from their website “Business confidence fell 14 points in November to -57, while expected own activity fell 11 points to -14, only 8 points shy of 2009 lows. Activity indicators fell. Residential construction intentions tanked. Employment intentions were negative for the first time since Oct 2020. Inflation pressures remain intense, though pricing intentions eased.” So generally, the feeling is 2023 is looking rough for businesses.
Of note from our own purely unscientific observations we have seen an increase in the level of enquiries coming into the office over the last few months and an uplift in both solvent and insolvent jobs. What this has been driven by is difficult to say but likely the above factors affecting businesses along with a recent increase in IRD collections action and the cut back in government businesses subsidies seen over the last two years since the commencement of Covid lockdowns.
Company Insolvencies – Liquidations, Receiverships, and Voluntary Administrations
The elevated levels of appointments of the 3 prior months continued into October and November 2022.
Of interest November reached over 200 appointments for the first time in three years, Sept 2019 – 206 being the last time.
The breakdown of total appointments saw a constant levels of solvent appointments, court appointments and receiverships, the jump was seen in insolvent shareholder appointments jumping by almost 50% of earlier months from 67 in September, 83 in October to 115 in November.
The media has taken a recent interest in insolvency appointments in particular tiny home builders and Voluntary Administrations appear to be the flavour of the month. Where administrators have been appointed the recent trend of combining the appointment with a receivership to tie up creditors powers continues by a few practitioners.
From a yearly point of view total appointment figures for 2022 after 11 months are above the full 2021 calendar year. At this point it appears likely total appointments will exceed 2020 appointments before the year is out but are unlikely to reach 2019 levels as December is typically a slower month overall with the Christmas break and courts shutting.
Winding Up Applications
The gradual drop often seen over the 2nd half of each year changed in both October and continued on further in November 2022. This was a higher monthly total winding up applications than any other month in the last two years.
While corporate applications have risen, IRD applications continue to do the bulk of the heavy lifting in total applications. IRD will have a back log of derelict debtors from the last two years and are only now beginning to play catchup. How far this continues into 2023 as an election year will be a question yet to be determined.
Personal Insolvencies – Bankruptcy, No Asset Procedure and Debt Repayment Orders.
While there has been a jump in corporate appointments this has not been reflected in personal insolvency appointments. The numbers continue to track down to lower levels than prior years.
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