The number of Canberra businesses reached a record high of nearly 31,00 in June 2020, but new analysis released by the Canberra Business Chamber today found the Capital now has the country’s highest closure rate.
Australian Bureau of Statistics data published this week recorded 30,858 actively trading businesses in the ACT at the end of last financial year, which the Chamber estimated was 800 more than the year before.
Canberra Business Chamber CEO Graham Catt said this was “the highest number we’ve ever seen in the city”.
But while 4,900 new firms began work in Canberra in the 2019-20 financial year, close to 4,100 closed in the same period.
Small business championed the growth, and according to Mr Catt this was representative of a local trend.
“In effect, the ACT economy over time is becoming more and more reliant on very small enterprises for most of our job and wealth creation,” he said.
“Small business is big business, as far as the local economy is concerned.”
Mr Catt said almost all the growth occurred in the micro- and small-sized business sector, which meant firms with fewer than 20 staff.
“The number of large firms actually declined, and today we have only three dozen private businesses which are regarded as large-scale employers – that is, organisations with more than 200 employees.”
The Chamber’s CEO said the ACT faces challenges when it comes to ensuring startup businesses survive to prevent “unnecessary failures”.
“The same data also shows that whilst the ACT still has the highest percentage of new start-ups of any state or territory, it’s accompanied by the highest business exit/closure rate nationally.”
Mr Catt said the Canberra business closures represented a huge amount of lost money, energy and jobs.
“We need to get better at ensuring the long-term survival of businesses.”
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