![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/10\/Liquidations-September-2024.jpg\")
<\/a><\/figure>\n\n\n\nHowever, it should be noted that a declining trend may also reflect a lower number of businesses in operation, not necessarily a turnaround in operating conditions.<\/p>\n\n\n\n
According to Stats SA’s data, the finance, insurance, real estate and other business services sector continues to be the hardest-hit segment, followed by trade, catering and accommodation.<\/p>\n\n\n\n
This has been a consistent trend over the years, with these businesses hardest hit by the stagnating economy, power crisis, infrastructure crisis and high-interest-rate environment.<\/p>\n\n\n\n
The community, social and personal services industry has also been hard-hit – while manufacturing and construction have not been able to escape the effects, either.<\/p>\n\n\n\n
There are have been several notable liquidations taking place in the country this year, with many popular and well-known brands shutting up shop. These include the likes of electronics group, Ellies; the Cross Trainer; Hohm Energy; and Drip Footware.<\/p>\n\n\n\n
However, liquidation is not the only signifier of difficult business operations\u2014other businesses are also choosing to close their operations and exit the South African market.<\/p>\n\n\n\n
This includes online retailers and big banks.<\/p>\n\n\n\n
The liquidation data and reported troubles at these businesses reflect the economic storms many have had to face in the country over the last few years – but the slowdown does point to some hope.<\/p>\n\n\n\n
The load shedding crisis has all but completely abated, with national outages suspended for over seven months now, and there has been a distinct turn in market sentiment since the formation of the Government of National Unity.<\/p>\n\n\n\n
While the latter is yet to deliver fundamental changes for the economy, the former\u2014a more stable electricity supply\u2014is already yielding economic gains. South Africa’s economy is expected to grow a little faster than previously anticipated, with the IMF pegging 1.1% GDP growth in 2024, rising even higher in 2025.<\/p>\n\n\n\n
In terms of interest rates, further relief is also expected here. <\/p>\n\n\n\n
A 25 basis point cut in September (not yet reflected in the data) is expected to be followed with another 25bp cut in November, with more to come in 2025.<\/p>\n\n\n\n
The rate cutting cycle should stimulate consumer spending, boosting businesses, while also bringing some much needed relief to indebted businesses and owners.<\/p>\n\n\n\n
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