Business failures in Australia may rise this year with the possibility of insolvencies surpassing last year's figure of over 10,000 businesses, Dun & Bradstreet said in its latest announcement.

Dun & Bradstreet, the world's leading source of commercial information and insight on businesses, reported that nearly 3,000 firms failed in the second quarter of 2011.

Citing its Business Failures and Start-ups Analysis report, Dun & Bradstreet said preliminary 2011 data indicates the number of business insolvencies continue to rise.

"If rates continue at this pace, this number will comfortably surpass the 2010 figure of over 10,000," the company said in a report on its website.

During the June quarter, Dun & Bradstreet said business failures rose 25 percent to reach their highest level in 12 months.
It said smaller businesses (those with employees of between 1 to 49 members) and those in the retail, finance and service sectors recorded the highest failure rates.

Business insolvencies were mostly noticed in NSW and Victoria, at 22 percent and 26 percent respectively.
Firm failures reached over 1,200 in NSW while Victoria came in second at 615 and Queensland third at 462.

According to Dun & Bradstreet, the Finance, Insurance and Real Estate sectors followed by Services, Construction and Retail sectors recorded the highest failure rates (an average of 40 percent) during the June quarter.
The Mining and Public Administration sector posted single digit failures during the June quarter, the only two sector to show an improvement.

Dun & Bradstreet CEO Christine Christian said the business community is heading towards "a number of economic challenges" until next year.

"Our recent trade payment data recorded a 20 percent jump in delinquent payments...Cash flow is the mitigating factor here, particularly for small businesses who feel the effects a lot faster than larger companies with cash reserves to match," Christian said.