Liquidations up 36,9% in October

October saw a 36,9% year-on-year increase of liquidations in South Africa, according to statistics released by Statistics South Africa (StatsSA).

For the first ten months of 2010, liquidations grew by 1,8%, from 3 264 cases to 3 323, when compared to the same period in 2009.

According to StatsSA, the 1,8% increase was largely due to a 3,7% rise in voluntary liquidations, while company liquidations decreased by 4,7% in the first ten months of 2010.

Data from StatsSA, indicates that 46% of the number of liquidations came from the financing, insurance, real estate and service sectors.

However, for the first nine months of 2010, insolvencies decreased 32,8%, from 4 305 cases to 2 892, and the yearly figure also decreased 27,6% in October.

The indicator has exhibited a good correlation with the Organisation for Economic Cooperation and Development (OECD)'s leading indicator, which tracks the world economic cycle, albeit with a short lag.

The OECD leading indicator has been moderating downwards slightly on an yearly basis over the last few months which has suggested that SA’s leading indicator would also move lower in the months ahead, Stanlib's Kevin Lings said.