More than 18 months after the global recession triggered by the COVID-19 pandemic started, the economic recovery continues. This trend owes much to progress in the vaccine rollout over the summer, particularly in advanced economies. In turn, this is spurring a rebound in consumption of high-contact services. The situation remains heterogeneous in emerging economies: this rebound is benefitting export-oriented countries, while service-dependent economies continue lagging.
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The retail sector’s activity has been affected by the COVID crisis through social distancing measures and closure of stores. However, the effect of the pandemic on the sector greatly varies across countries and segments. While some countries did experience lower retail sales in 2020, the effect was null in others and even positive in Northern European countries. The impacts are also different according to the segments, clothing stores being the most affected.
Overall, COVID should have a limited impact on the retail sector and the most impacted segments are expected to recover as soon as the situation eases. However, maritime freight disruptions, which cause supply issues and higher inflation, could be an obstacle to the full recovery of the retail sector in 2021.
While the restrictions linked to the COVID-19 pandemic put a temporary stop to the upsurge of protest movements, a new wave is on the horizon. Protests, mainly in emerging countries, are expected to increase due to an unprecedented deterioration of socio-economic indicators. In 2020, the Coface social and political risk indicator reached a record of 51% worldwide, and 55% in emerging countries.
The 5th edition of Coface’s survey on corporate payment experience in Germany was conducted in July and August 2021, with 819 companies participating.
One of the main takeaways is that German companies seem to have acclimatised to the pandemic environment. More companies are offering payment terms compared to last year when the figure had fallen sharply. Although Germany experienced a strong recession in 2020 and early 2021, payment discipline continued to improve in 2021 compared to already good results in 2020. Furthermore, the average duration of payment delays shortened by over a week.
The UAE’s economy was hit by a double shock in 2020: the collapse in oil prices and the COVID-19 pandemic. According to preliminary estimates, the UAE’s economy shrank by 6.1% in 2020. However, the outlook is brighter for 2021. Coface expects growth at 3.1% thanks to a fast vaccination campaign, a sharp recovery of the global economy and the rebound in energy prices.Read More
Coface Study: Insolvencies in Romania increased in the first semester of 2021 by 23% compared to the same period last year
The latest Coface Romania study shows that in the first six months of 2021, 3,033 new insolvency proceedings were opened, +23% above the level recorded in the same period of the previous year. Insolvencies opened in the first half of this year have returned close to the level before the Covid-19 pandemic and are expected to increase by at least 10% over the previous year. The number of employees reported by insolvent companies in the analyzed period is 11,294.Read More
The metals used in electric vehicles, such as lithium, cobalt and copper, are at the heart of the revolution currently taking place in the automotive industry. Strict regulations, government support programmes, and the increased use of electric vehicles in certain regions are all strongly stimulating demand for these metals, which are now indispensable in the manufacture of batteries. Imbalances between supply and demand are thus pushing up their prices, even though the market share of electric vehicles remains modest. In its latest analysis, Coface does not foresee any major changes in these price trends over the next two years.
18 months after the start of the pandemic, access to vaccination is now the main factor setting the pace of people's daily lives and the global economy. GDP growth forecasts for 2021 have been revised upwards (+5.6%), but this is mainly the result of positive surprises from the United States. These improved growth prospects are reflected in world trade: after a 5% decline in volume last year, Coface forecasts an 11% increase for 2021.Read More
Coface’s 2021 Asia Corporate Payment Survey, conducted between October 2020 and March 2021, provides insights into the evolution of payment behavior and credit management practices of over 2,500 companies across Asia Pacific during a pandemic year. Respondents came from nine markets (Australia, China, Hong Kong SAR, India, Japan, Malaysia, Singapore, Thailand and Taiwan) and 13 sectors located in the Asia Pacific region.Read More
Remote work has emerged as a new norm during the Covid-19 pandemic. As we emerge from the crisis, this cultural shift could allow companies located in developed countries to hire teleworking talent in emerging countries to reduce their labour costs. Coface estimates that the total number of teleworkable jobs in high-income economies is about 160 million, while the number of potential teleworkers in low- and middle-income economies is about 330 million. Coface also estimates that French compaines would save 7% on labor costs even if only 1 in 4 teleworkable jobs were offshored.Read More
Overall, the Chinese economy expanded by 2.3% in 2020, being the only major economy to record growth, and Coface expects the GDP to accelerate to a 7.5% growth in 2021.This would be the fastest pace since 2013, and comfortably above the minimum of 6% set by the authorities.Read More
Insolvencies in Germany dropped significantly in 2020 compared to 2019, despite the worst recession since 2009. This is largely thanks to public support programmes. However, the early-announced applications for regular insolvency proceedings (Regelinsolvenzverfahren) at courts already increased sharply in February and March, signaling a pending increase in corporate insolvencies in the next months. Coface’s forecasting model shows that up to 4030 insolvencies were prevented by the State-support in 2020, which is now in single parts being withdrawn, and could take place in 2021/22. From a corporate perspective, the crisis is far from over.Read More
As a leading player in credit insurance, Coface supports companies with guarantee instruments that help them take part, in safe conditions, in public procurement procedures. The surety bonds offered by Coface represent a viable alternative to the letter of credit and are dedicated to companies involved in public procurement contracts.Read More
More than a year after the start of the pandemic, global economic trends are uneven due to lingering uncertainties around the spread of COVID-19. The acceleration of the vaccination process, as well as its effectiveness, are key to an economic recovery. In this context, the prospects for a return to normalcy are both uneven and uncertain across sectors of activity and geography, according to the latest barometer from Coface.
Turnover: €378m, up 4.2% at constant FX and perimeter
Trade credit insurance growing by 6.1% at constant FX benefiting from stabilising client activity
Client retention close to record highs; positive price effect (+2.9%)
Business Information continues to grow (+9% at constant FX)
Factoring and debt collection down on lower volumes
Coface Romania Analysis: Vulnerability of the business environment in the context of the Covid-19 pandemic
Coface Romania launched an analysis of the business environment in the context of Covid-19 during Country Risk Conference, a business event with tradition, now in its 16th edition, held on April 21. According to the data, 4 out of 10 companies active on the domestic market were already vulnerable before the negative economic impact caused by the Covid-19 pandemic during 2020.
As the world's largest importer, and second largest exporter of manufactured goods, the United States has had a trade deficit since the early 1970s. Escalating trade tensions - in particular with China - and the COVID-19 pandemic, which disrupted trade flows have affected the trade balance in recent year. The trade deficit has reached a record level of over 900 billion USD in 2020.Read More
The economic crisis caused by the COVID-19 pandemic heralded major business failures and insolvencies in France, and across the eurozone as a whole. But, in 2020, and even if the real impact of the COVID-19 crisis remains uncertain, the number of insolvencies actually fell in all major European economies. According to research by Coface, a leading player in credit insurance, the gap between the expected deterioration of the companies’ financial health and the number of insolvencies suggests that there is a high number of “hidden insolvencies” that have been postponed, rather than prevented. This suggest that, in both France and Europe, there is high number of unviable companies whose failure is only a matter of time.Read More
Diversification is one of the many effects of oil price volatility on Middle Eastern and African oil producers
The COVID-19 pandemic’s negative impact on global GDP growth and global trade volumes has caused a sharp drop in oil prices in the spring of 2020. This price drop, even if temporary, has affected Middle Eastern and African oil exporters differently, in line with their national output’s dependence on oil, as well as their fiscal strength and international reserves.
The year 2020 was marked by the COVID-19 pandemic. In order to mitigate the impact of this difficult economic situation on Polish companies, various liquidity-supporting aid measures were introduced, such as tax and contribution exemptions and deferrals. As a result, despite the extensive economic crisis, payment delays between companies have shortened – however, with these aid measures are to be phased out in 2021, two thirds of companies expect their business activities to deteriorate this year.Read More
Coface Study: Insolvencies in Romania decreased by 13% in 2020 compared to the previous year and are at the minimum of the last decade
The most recent study by Coface Romania shows that in 2020, 5,564 new insolvency proceedings were opened, with -13% below the level registered in the previous year. Last year also reported the minimums of the last decade in terms of payment incidents (only RON 2.2 billion, -29% vs. 2019) and the regeneration ratio (OUT: IN = 1.19) in the business environment. All these positive developments are exceptional, given that they were recorded in a year with the most severe economic contraction of the last decade in the context of the Covid-19 pandemic.Read More