This headline above was from May this year and those numbers have continued at a similar rate throughout 2026.
Monitoring business closures each month is something I have been doing for a number of years as this type of data is very real and is a great indicator of where we are currently with the South African economy. To say that this where we are right now as an economy is a strained business environment is an understatement.
The obvious problem with business closures is they only add to the unemployment numbers which reduces the public purchasing power. Last month saw an additional 250 businesses shut their doors adding to the combined total of 2089 for the 9 months thus far in 2026.
The figures are difficult to compare each year due to the total number of businesses shrinking so one cannot place a positive spin saying the numbers are less than last year or less than the numbers from 2016. The base is shrinking and unemployment is rising leaving less tax payers to cover the expected tax revenue each year.
Hard not to compare this year versus last year and we are already 25% more with 3 months still to run. Lets say there is no positive spin whatever way you look at this. There is a reason why this was never mentioned in the business closure report because this is not a good sign.
The businesses hardest hit are the service related industries like insurance, financing, business services and real estate. When businesses or people are struggling financially the first thing they do is look at over heads and insurance takes a back seat as they will take the risk of having none if things are that tight. Business services is another sitting in a similar category as whether it is staff training or another expense along those lines it is not a must do.
Having a manufacturing business with customers owing large sums of money is always a worry and why keeping an eye out for new trends or risks is why I pay attention to this type of data. One large client owing big money could set you back an entire year and we have been fortunate to avoid having to deal with this. We have insurances in place to cover any mishap including non payments, but we would obviously prefer this never happens.
When you are landing new customers through networking or cold calling it is harder to spot than those phoning you directly. Those phoning you out of the blue may be genuine customers looking for a better service or price, but also could be as they have lost their current supplier due to non payments. In this type of economy I would say it is 50/50 and why back ground checks happen first before taking on new customers.
We have some customers who have already placed their orders up until June next year and have been loyal customers for over 10 years so there is still good business to be found if you look in the right areas.
The online sports business my family is involved with amazes me all the time as the sales are always steady and yet the target market is so small. The target market for these items is estimated to be in the 200 000 customer range if you take into account salaries of the higher end tax payers. Literally 1% of tax payers covers 80% of personal income tax revenue and the other 20% is from the lower end being the other 10 million employed. They may be working, but the majority do not pay personal tax earning less than R10k monthly. This tells you how small the market is for higher end items in South Africa and you are only realistically looking at 10% of 200 000 which is now only 20 000 genuine customers.
Each month that ticks by with another 250 businesses lost is the worry as this cannot continue and something needs to change. Surely the people in charge need to wake up and stimulate the economy through providing jobs and getting things moving heading upwards instead of downwards.