Hit by increasingly stringent regulations, particularly for environmental purposes, the global automotive industry is facing a downturn and is being forced to reinvent itself.
In a gloomy global economic context, the automotive sector faces several very specific challenges, including stronger and stricter environmental regulations. As a result, car sales are experiencing negative growth not seen since the Great Recession of 2008 and there is an uncertainty prevail in the sector.
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While the number of companies facing corporate insolvency has decreased since the beginning of the year, their cost has increased, both financially and in terms of the number of jobs affected.
After a difficult first quarter, marked by the repercussions of the “yellow vests” movement, the number of corporate insolvencies since the beginning of the year in France is set to decline for the fourth consecutive year. However, Coface expects a slight rebound in insolvencies in 2020 (+0.9%), mainly due to the expected slowdown in the construction sector, which was largely driven by public works in 2019 in the run-up to the municipal elections.
According to Coface's 2019 Germany payment survey of 442 companies, the country is in a phase of change. The pressure on companies from international competition is increasing. This is one of the reasons why the pressure on their cash flow continues to increase. On average, German companies saw their payment terms increase from 29.8 days in 2017 to 35.9 days in 2019.
Even if credit risks are insured, companies' confidence in their customers has declined. Short- and medium-term credit periods still dominate the market. 87% of companies request that payments be made within 60 days – a very short time in terms of international comparison. Clients missing payment deadlines now affects 85% of German companies, compared to 78% two years ago.
Recession or slight decline, CRAFT provides the keys to the slowdown in the major economies of the Eurozone.
Since the beginning of 2019, there have been increasing signs of a slowdown in global growth. While all economists agree on this downward trend, after reaching the peak of the cycle in 2017, the question mark now lies in the extent of this slowdown, particularly in the Eurozone. While some people mention a recession in 2020, most economists predict "only" a slight slowdown.
To have more clarity, it is therefore important to have reliable and innovative forecasting tools to take advantage of existing indicators. This is why Coface has decided to develop its own forecasting tool: CRAFT (Coface Research Activity Forecasting Tool).
Agri-food sector outlook: in a global economy marked by protectionist tensions, what does the future hold?
Central to the current trade tensions, notably between the USA and China, the global agri-food sector is impacted by knock on effects, notably via downward trends on the prices of key agri-food commodities, such as soybean. Coface has conducted an in-depth analysis of future trends in this market.
A particularly strategic sector, agri-food (along with ICT) is one of the sectors key to the current trade war between the United States and China. Recently, Chinese authorities have taken steps to ban all agri-food imports from the United States, in response to the tariff increases announced by the Trump administration.
With business morale being affected by a summer marked by a multiplication of areas of political uncertainty around the world, it seems likely that 2020 will be a year of economic decline.
The Argentine currency crisis, major demonstrations in Hong Kong and Russia, Brexit, the attack on oil installations in Saudi Arabia – these are just some of the many events that marked the third quarter of 2019. Increasing political uncertainty, combined with the decline in the volume of world trade, the high volatility of oil prices, and the decline in automobile sales in Europe and China, has continued to affect corporate morale.
A dominant global maritime and economic power in the 17th century, the Netherlands has remained a major player in world trade. In 2018, the Netherlands was the sixth-largest merchandise exporter in the world and, in terms of GDP, ranked third in 2015 (just behind Ireland and Switzerland).Read More
Insolvencies in Central and Eastern European Countries (CEE): despite an increasingly difficult global economic context, the situation remains posit...
The Central and Eastern European region has experienced unparalleled growth in the European Union. However, a slowdown is expected in the coming years.
The CEE region has seen an improvement in economic activity in recent years. In 2017 and 2018, GDP growth in the region rose to 4.6% and 4.3%, respectively, the highest rates since 2008.
Despite improving economic performances across the Gulf Cooperation Council (GCC), monetary and financial conditions remain tighter compared with before 2015. Access to financing remains one of the key issues for companies, particularly for small- and medium-sized enterprises (SMEs). Loan growth in the region has recovered somewhat thanks to higher oil prices, but it remains below its historical averageRead More
A new survey conducted by Coface Romania on the wholesale of pharmaceutical products indicates a positive trend of the revenues of the companies operating in this sector of activity in 2017, but with a slight decrease in profitability. This study aggregated the data of 1,662 companies, which submitted the financial data for 2017 and generated RON 28.6 MLD consolidated turnover.Read More
US/China trade war, struggling automotive sector, slower growth in emerging economies... the second quarter of 2019 highlights a global economic slowdown
The decline in world trade is confirmed for this first half of the year and even if a slight recovery is expected in the second half of the year, it should suffer a 0.7% loss in volume over the year according to the Coface barometer. World economic growth is expected to decrease from 3.1% in 2018 to 2.7% in 2019 and then remain stable in 2020. In this context, Coface expects that a majority of countries should see an increase in corporate insolvencies this year.
Coface Survey: 33% decrease of Insolvencies in Romania in H1 2019 compared to the same period of the previous year
A new survey conducted by Coface Romania on the evolution of insolvencies in Romania in H1 2019, points out a 33% decrease in the number of insolvent companies during this period, in the context of a real and sustainable economic growth of 5.1%. However, the macroeconomic evolution is not sustainable due to many imbalances: the growth of the fiscal deficit by 81% during the first half of this year compared to the same period of the previous year, the highest annual inflation in the EU of 4.1%, the increase of the trade deficit and depreciation of the national currency. Moreover, Coface’s analysis shows that the decline of insolvencies is offset by the increase of the number of radiated companies, the payment delays increase significantly and the large companies are facing a challenging economic environment.Read More
While the yellow vests movement did have a strong impact on corporate insolvencies at the beginning of the year, the decline in mobilization and the resilience of economic growth had a positive impact on the health of French companies in March and April.
Coface's fourth survey on payment terms in Morocco shows a situation that remains worrying despite a slight improvement.
Coface presents its fourth survey on the payment behavior of companies in Morocco. Carried out at the beginning of 2019, this survey aims to monitor the evolution of payment terms and delays between the various Moroccan economic actors.
Positive revenue trend and an increase of 17% in 2017 compared to the previous year for wholesale of wood, construction materials and sanitary equip...
Positive revenue trend and an increase of 17% in 2017 compared to the previous year for wholesale of wood, construction materials and sanitary equipment
• 17% increase in consolidated revenues in the sector;
• The money conversion cycle became positive in 2017, 3 days, from -1 day in 2016;
• Decrease in the period of receivables collection from 64 to 60 days.
• More than one third of companies (43%) registered a decrease in revenues;
• Almost a third of the companies operating in this sector do not obtain profit from their core business;
• Among companies with turnover > EUR 1 Million, 2018 was a maximum in terms of the number of incidents recorded and the number of companies for which they were registered.
China coordinated its approach to 5G and some successes are already visible. However, China still relies on imports, especially for high-end products, leaving the sector exposed to protectionist threats. Moreover, the deployment of 5G networks by Chinese companies is perceived as a cybersecurity risk by many recipient countries. The US is banning Huawei equipment and pressing its allies to do the same, which could limit the growth of Chinese 5G in the future.Read More