On Monday, Qantas reported that “some softness in demand” had begun to emerge over Easter and the school holidays, and then yesterday National Credit Insurance (NCI) said its trade credit risk index for the first quarter had jumped to its highest level ever – above the worst of the GFC.

NCI insures trade creditors against insolvency risk. Its index is a composite that pulls together claims received, overdue reporting and other adverse events such as changes in credit limits.

Here’s a chart of the index:

The firm’s managing director, Kirk Cheesman told me yesterday that at the start of February, NCI had 250 claims outstanding; during that month there were another 141 lodged – an increase of more than 50 per cent in one month alone.

He said the insolvencies of Dick Smith and Arrium have had an impact on the claims, but there has been a dramatic increase in SME insolvencies and invoice payment problems more broadly.

Overall insolvency insurance claims in the first quarter were 80 per cent above the same quarter last year. The highest number of claims was in the advertising, building and hardware sectors.

In late March, both ANZ and Westpac reported that credit provisions would be higher than expected – ANZ by $100 million, or about 12 per cent. ANZ’s Graham Hodges said there were “pockets of weakness” associated with low commodity process in the resources sector.

Yesterday, I spoke to David Mond, who runs one of the country’s biggest debt collection businesses, Recoveries Corporation Group, and he is also seeing a significant increase in problems.

“We’re seeing a lot more referrals for credit card and personal loan collections than we did last year. Debt recovery work has increased very substantially”.

He said there were serious problems emerging in WA associated with the decline in property values there. Banks are holding off foreclosures on many customers because the value of the security is well below the amount owed.

So far, there are no signs in the employment data that a recession is building in Australia, with the unemployment rate falling to 5.7 per cent last week, except for the fact that 134 per cent of the increase in jobs was part-time - full-time employment fell 8,800.

That suggests that pressure on household incomes is increasing, since part-time jobs pay less than full-time ones. It also reinforces the idea that small business is under growing pressure because they are being forced to cut back.