More than 1000 Australian businesses closing every day

More than 1000 Australian businesses are closing their doors every day, with updated figures revealing the challenging reality facing entrepreneurs across the country.

An update on previously released figures from the Australian Bureau of Statistics shows 370,000 businesses closed down this year.

Despite the high closure rate, 437,150 new businesses started trading over the same period, meaning there were actually 67,150 more businesses opening than closing across the year.

This is relatively flat over the past five-year period.

Both figures are higher than they were in 2023 and 2024, indicating a period of increased economic activity and business turnover.

CreditorWatch chief economist Ivan Calhoun said despite the confronting closure figures, it was a usual business cycle and not a sign the economy was in trouble.

“The Australian economy keeps growing, the population keeps growing, as we are a very large economy these days,” he said.

“So it is not surprising that there is an awful lot of new businesses created each year or that a lot of businesses close each year.”

As of June 30, Australia now has 2,729,648 actively trading businesses with 994,178 of these businesses employing others.

The data also shows specific sectors are driving the growth, with non-market sectors that primarily rely on government support experiencing the highest number of new business entrances.

Healthcare and social assistance businesses surged by 6.6 per cent compared to last year, while the construction sector added 76,414 new businesses.

Mr Calhoun said the healthcare and social assistance sector remained a major growth area for the economy, driven by demographic changes and government support programs.

“Economists have been remarking for the last two years that there has been perhaps too much growth in that industry, with some of it attributed to the NDIS,” he said.

“We are seeing the population ageing so there’s extra demand for services and we have provided the NDIS, which provides very valuable assistance to people with disabilities.”

However, Mr Calhoun warned the rapid growth in the sector had raised concerns about exploitation of government funding.

“The part of the NDIS people don’t want to see is businesses overcharging due to it being a government service,” he said.