CONFIDENCE may be on the rise on the Gold Coast, but according to a new report the city is among the worst in Australia for looming business failures.

Accounting firm SV Partners estimates more than 2000 Gold Coast businesses, or 3 per cent of all operating business in the region, could hit the wall over the next 12 months.

The SV Partners March 2016 Commercial Risk Outlook Report, which analyses more than 20 million financial records from Australia's 2.34 million operating businesses, has identified the Gold Coast among the top two regions at risk of business default.

Inner Melbourne is at the top of the list with 2552 businesses at risk, while SV Partners estimates 2027 Gold Coast businesses are at risk, followed by 1938 businesses in Sydney's city and inner south.

The report finds that Queensland overall is second most at-risk state, with 2.4 per cent of businesses under pressure.

Nationally, almost 50,000 Australian businesses will face tough times in 2016, headed by construction, professional services and retail.

SV Partners Gold Coast Director Matthew Bookless says a surge in property development across the Gold Coast, as well as rising tourist numbers, have created 'false confidence' in the economy's overall health.

"This activity does not necessarily translate into economic success for many key industry sectors," he says.

"Given the level of Gold Coast businesses currently in default and with personal insolvency figures on the rise, local businesses can expect to see more difficult times ahead.

"The 2018 Commonwealth Games will however likely provide much needed relief to local businesses and residents by providing increased employment opportunities and stability, as well as development and general economic benefits over the next several years," he says.

SV Partners says businesses most at risk are those with annual turnover of less than $1 million, and among those it counts 534 in the high-risk category.

Southport Chamber of Commerce President Laird Marshall says despite growth in the city's economy, Gold Coast businesses remain reliant on outside factors. He says to secure sustained growth the city needs to establish itself as a safe place to do business.

"The Gold Coast is still very reliant on activity generated by the impetus of the tourism, education and, to a lesser extent now, the property market," Marshall says.

"However while we have some control of this on a local level, interstate and overseas audiences largely determine what level of buoyancy and growth we have.

"Our overall perception to these markets as a destination largely focuses around beaches with lifeguards and theme parks.

"The Games are an opportunity for the Gold Coast to change that mindset, and showcase the other benefits of doing business here."

Bookless says to fend off financial stress or failure, businesses needed to act early.

"By being vigilant in accounts collection, closely monitoring cash flow, ensuring financial reporting is providing a complete and up to date picture of their financial position and working closely with their accountant, businesses can reduce their financial risk," he says.

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