Business insolvency rate by industry and state: Australia, 2025-26
Insolvencies per 1,000 businesses for every industry and state, built from ASIC and ABS data. Neither agency publishes this rate, so we calculated it.
General information only
By Andrew Beckett · 7 October 2026
The business insolvency rate in Australia was 5.03 per 1,000 businesses in 2025-26, and hospitality ran at 18.17, more than three times that. Neither ASIC nor the ABS publishes this rate. We built it by dividing ASIC’s insolvency statistics by the ABS count of businesses operating, for every industry and state, and you’re welcome to cite the tables below.
Why measure a rate, not a count?
Because raw counts mostly measure how big an industry is. Construction had the most insolvencies of any industry in 2025-26 (3,472), but it also has 478,651 businesses, so its rate is 7.25 per 1,000.
Accommodation and food services had fewer insolvencies (2,078) from a quarter as many businesses (114,369), which puts its rate at 18.17. Headlines that rank industries by count end up ranking them by size. The denominator is the whole point.
What is the insolvency rate for each industry?
Accommodation and food services is highest at 18.17 per 1,000 businesses, and rental, hiring and real estate is lowest at 1.65. Construction, often called the riskiest industry, sits at 7.25.
| Industry | Per 1,000 businesses | Businesses (ABS, Jun 2026) | First-time external administrations (ASIC, 2025-26) |
|---|---|---|---|
| Accommodation and food services | 18.17 | 114,369 | 2,078 |
| Information media and telecommunications | 10.02 | 26,250 | 263 |
| Other services | 9.98 | 138,735 | 1,384 |
| Manufacturing | 7.34 | 90,879 | 667 |
| Construction | 7.25 | 478,651 | 3,472 |
| Arts and recreation services | 6.89 | 40,792 | 281 |
| Retail trade | 6.44 | 156,143 | 1,006 |
| Administrative and support services | 5.72 | 130,330 | 745 |
| Transport, postal and warehousing | 3.11 | 261,109 | 813 |
| Financial and insurance services | 3.11 | 139,417 | 433 |
| Wholesale trade | 3.03 | 82,448 | 250 |
| Professional, scientific and technical services | 2.71 | 366,289 | 993 |
| Health care and social assistance | 2.04 | 227,702 | 464 |
| Rental, hiring and real estate services | 1.65 | 319,717 | 527 |
| All industries | 5.03 | 2,814,778 | 14,153 |
Agriculture, mining, education, utilities and public administration aren’t in ASIC’s industry table, so they’re missing here rather than zero.
Which state has the highest business insolvency rate?
The Australian Capital Territory, at 6.78 per 1,000 businesses, and Western Australia is lowest at 2.98. The ACT’s rate is 2.3 times Western Australia’s.
| State or territory | Per 1,000 businesses | Businesses | First-time external administrations |
|---|---|---|---|
| Australian Capital Territory | 6.78 | 37,785 | 256 |
| New South Wales | 5.69 | 942,658 | 5,367 |
| Northern Territory | 5.56 | 17,440 | 97 |
| Victoria | 5.30 | 773,986 | 4,100 |
| Queensland | 4.98 | 543,277 | 2,706 |
| South Australia | 3.74 | 174,310 | 652 |
| Tasmania | 3.22 | 45,094 | 145 |
| Western Australia | 2.98 | 278,520 | 830 |
| Australia | 5.03 | 2,814,778 | 14,153 |
Two independent measures point the same way. Across the eight states and territories, the insolvency rate and the ABS four-year business survival rate correlate at −0.88: where more businesses fail, fewer survive four years. That agreement is the reason to trust either number.
The Northern Territory’s rate rests on 97 insolvencies, so a single large group collapse would move it noticeably. The state rows add to 2,813,070 businesses; the remaining 1,708 have no state recorded by the ABS.
Did insolvencies rise or fall in 2025-26?
They fell 3.9%, from 14,722 to 14,153, the first fall in four years. Most industries followed, but two went the other way.
- Retail trade rose 15.5%, from 871 to 1,006.
- Transport, postal and warehousing rose 10.8%, from 734 to 813.
Queensland drove much of the retail rise: retail insolvencies there rose 73% to 290, while New South Wales retail fell 2%. Hospitality, the highest-rate industry, fell further than any other large industry, down 16.1% from 2,476 to 2,078. That’s still more than three times the national rate.
What the rate does and doesn’t tell you
The rate is external administrations per 1,000 businesses, not the chance that a given business fails. Use it to compare industries and states, not as a probability.
- 1ASIC counts companies; the ABS counts every business. Sole traders and partnerships, 64.6% of all businesses, can’t appear in ASIC’s figures at all.
- 2That flatters industries full of sole traders. Transport’s 3.11 includes a large share of owner-drivers who aren’t companies. It isn’t evidence that transport is low-risk.
- 3Small counts swing hard in percentage terms. We haven’t published a percentage change on any base under about 40.
- 4The year is fixed at 2025-26. August 2026 includes 542 related companies from one group (ASIC’s own note), which would distort any figure carried into 2026-27.
How do lenders use an industry insolvency rate?
As a base rate. A lender pricing a loan for a café is underwriting against an industry that enters external administration at more than three times the national rate, and that shows up as tighter terms, more security or a shorter list of willing lenders.
It cuts the other way too. A strong business in a high-rate industry is where a broker earns their keep: the job is putting that business’s own numbers in front of a lender who’ll look past the industry average. If ATO debt is part of the picture, our guide to ATO debt and insolvency covers what lenders look for.
How did we calculate it?
- Numerator: ASIC Australian insolvency statistics, Series 1 (companies entering external administration or having a controller appointed for the first time), financial year 2025-26, published 14 September 2026. Industry from table 1.2, state from table 1.3, the cross-tab from table 1.4.2.
- Denominator: ABS Counts of Australian Businesses, including Entries and Exits (8165.0), businesses operating at 30 June 2026, released 18 August 2026.
- Rate: numerator ÷ denominator × 1,000, by ANZSIC industry division and by state of principal place of business.
- We’ll recalculate when ASIC publishes the 2026-27 year and when the ABS releases its next count, around August 2027. Every source we use is listed on our data sources page.
How should I cite these figures?
Credit the analysis and link to this page. You’re welcome to reproduce the tables on that basis.
Ecommerce Loans analysis of ASIC insolvency statistics (Series 1, 2025-26) and ABS Counts of Australian Businesses (8165.0, June 2026). ecommerceloans.com.au/insights/business-insolvency-rate-australia/
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