FEWER businesses failed last year as SA's economic conditions improved, resulting in a 15% drop in liquidations for the year to November.

This underlined a booming corporate environment in an economy estimated to have grown as much as 3,5% last year despite the concerns of exporters and gold miners about the effect of the stronger rand on their profits.

Altogether the 15% drop was driven by a sharp reduction in the number of compulsory liquidations companies failing for financial reasons and not liquidated voluntarily.

Statistics SA said yesterday that liquidations were down 33% on the previous year for November alone. This came after insolvencies for October dropped 55%.

Absa said the fall in liquidations and insolvencies reflected "an extremely healthy economic environment", and economic growth prospects for this year should enhance "both business and job security".

This trend is expected to be supplemented next week by figures likely to show a drop in the number of civil judgments granted against South Africans.

Absa economist John Loos said: "These declines show a dramatic improvement in credit quality.

"It is understandable that the consumer is in a good position when it comes to debt, given interest rates, which are now low , and economic growth that hasn't been seen in some time."