Company collapses hit a record high in 2012, with the construction industry bearing the brunt.
The construction industry accounted for more than one fifth of the 10,632 insolvencies in the past financial year, figures from the Australian Securities and Investments Commission show.
"All eyes are currently on the construction industry following tough conditions in 2012, and a formal government inquiry commissioned to assess the cause and extent of insolvency in the sector," accounting Firm Taylor Woodings said in an analysis of the figures.
"We predict 2013 will remain a challenging year for many Australian businesses due to continued low consumer confidence and the stubbornly high Australian dollar." The retail, tourism, and property and construction sectors were expected to face the greatest challenges in 2012/13, along with some segments of the mining services sector as the mining construction boom slowed.
The lacklustre nature of the building sector was highlighted by Australian Bureau of Statistics figures that showed residential approvals fell over two years from 176,561 in 2010 to 151,186 in 2012.
House building activity declined at its steepest rate in three months in December although house values improved in the fourth quarter of 2012 by 1.6 per cent, Taylor Woodings said.
Although the unemployment rate rose from 5.3 per cent in November to 5.4 per cent in December, business confidence rebounded.
Taylor Woodings said was probably due to improvements in financial and equity markets and a rate cut by the Reserve Bank of Australia in December.
While overseas and online competition will continue to affect many Australian retailers in 2013, Taylor Woodings said low interest rates and table employment levels should start to boost discretionary spending.