The Yarra Ranges has dropped in its ranking of business surety according to the latest data from CreditorWatch.
Over the three month period from June to September, the municipality fell six spots in the business risk index (BRI) figures released on Wednesday 18 October.
Despite dropping from third to ninth, the Yarra Ranges still rounded out the top 10 best performing regions with over 5000 registered businesses in the country, with Knox taking out tenth place.
It is however, a far cry from this time last year with the data placing the region in top position of having the lowest risk of insolvency.
The BRI for the Yarra Ranges has decreased from 73.8 in June to 68.1 for September, with the default rate now sitting at 4.26 per cent.
Analysts are continuing to see an upward trend in payment defaults, with a year-on-year increase of 57 per cent and is a key indicator of business failure.
CreditorWatch CEO Patrick Coghlan said easing inflation is a positive sign for business activity going into 2024 but conditions remain challenging.
“Rents, energy prices and the cost of services are keeping the heat in inflation but it’s encouraging to see some of the other drivers normalising,” he said.
“However, our forecast is still for the business failure rate to increase over the next 12 months.”
The data has also shown an ebb in business-to-business invoicing with an average 30 per cent reduction in the value of invoices, noted as being well below the pre-Covid levels.
Although a slight improvement was made between August to September, CreditorWatch said a reversal in this downward trend is a long way off and is influenced by a low consumer trend, a concerning combination in a high inflation environment.
CreditorWatch Chief Economist Anneke Thompson said business conditions, particularly among small businesses which are more sensitive to drops in consumer spending, are likely to remain subdued until at least mid 2024, when cuts to the cash rate are forecast.
The food and beverage industry still remains at the highest risk of payment defaults, followed by transport, postal and warehousing.
