Economic comment by Luke Doig, Senior economist, Credit Guarantee Insurance Corporation

The reported 7.1% fall in liquidations in the first half of 2013 to 1364 from 1468 a year earlier quite simply belies the true operating environment for business. Debt judgments against business have fallen 20.8% in number to 14,874 in the first five mo

This has been echoed by Credit Guarantee’s claims experience where average values of claims paid have soared 60.8% in the first half of the year. Credit Guarantee has to date paid R30.5 milllion as a consequence of the liquidation of Cosira (contractor on the Kusile project) while the recent demise of First Tech group will dwarf this many times over.

Crippling price increases, embattled labour relations and fragile confidence are what many industries are having to contend with and Credit Guarantee sees no respite on this front emerging at present. Unfortunately, this implies that additional liquidations are likely, adding more anguish to the ever-rising trend in unemployment.