Decrease in business liquidations ‘not a good sign’ for SA economy

According to Stats SA’s latest data on liquidations for May, 125 businesses shut their doors in May, a decrease of 17.2% from the previous year. 

Of these 125 closures, 114 were on a voluntary basis, while 11 were compulsory.

This takes the total liquidations for the first five months of 2024 to 638.

Roodt said job creation can only come through economic growth. 

South Africa’s economy is forecast to grow at an average of 1.6% over the next three years. 

“Business liquidation declining is not good for the economy because that also means that there are not that many businesses that are created,” Roodt said. 

“Remember, a good functioning economy is an economy where new businesses are continuously created, and old businesses are liquidated.

“So, actually, we are seeing a slowdown in economic activity due to lack of new business creation.”