With interest rates heading higher and financial conditions tightening, insolvency activity surged in August, according to new data from the Office of the Superintendent of Bankruptcy (OSB).
The total number of insolvencies, including both bankruptcies and debt restructuring proposals, jumped by 13.7% in August compared to the previous month, as bankruptcies increased by 10.7% and proposals surged by 14.8%.
Compared with the same month last year, the total number of insolvencies was up 27.6%, the OSB reported. Consumer insolvencies rose by 26.7%, and business insolvencies soared by 66.1%.
Additionally, the data showed that, for the 12 months ended Aug. 31, the total number of insolvencies was up by 4.4%, compared with the same period a year earlier.
Business insolvencies led the increase, jumping 25.3% year over year, while consumer insolvencies were up by 3.9%.
The accommodation and food services sector and the construction sector saw the biggest increases in insolvency numbers over that period, the OSB noted.