“At the start of 2022, businesses felt confident as Australia’s economy was performing well, and there seemed to be no indication that anything would change. However, it was not long before companies began to feel the impact of global economic turbulence.”
The US dollar faced increasing pressure as investors lost faith in it, while other currencies worldwide also experienced volatility. This ripple was felt throughout the global economy, with business leaders struggling to predict where things were headed accurately. In Australia, we saw several major changes during the year. The first was increasing unemployment as businesses began to lay off staff to save costs. Wage growth stagnated, and many families struggled financially as living costs soared.
Additionally, we saw a drop in consumer confidence and retail spending as people became more cautious about spending their money. Businesses were feeling uncertain and anxious about what might happen next – nobody knew whether this slump was just a temporary blip or if it signalled something more serious about our future economic prospects. All of these factors contributed to an overall slowdown in the Australian economy towards the end of 2022. According to data from the Australian Bureau of Statistics (ABS), many businesses failed in Australia between 2021 and 2022. In total, 15,152 businesses failed, constituting a 3.8% increase from the 14,585 business failures reported in the previous two-year period. Most of these were small businesses with fewer than 20 employees, with insolvency being the primary cause of most closures.