All Coface Publications
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shows that up to 4030 insolvencies were prevented by the State-support in 2020, which is now in single parts being withdrawn, and could take place in 2021/22.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
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.
The China-Australia bilateral relationship deteriorated sharply over 2020, with China imposing both formal and informal trade restrictions on a number of Australian exports, including coal, barley, beef, wine, cotton among others. However, despite China’s trade action, the Australian economy continued a solid recovery from the pandemic, registering two consecutive quarterly GDP growth in the second half of 2020 as business conditions move towards normality following an easing of containment measures. WRead More
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.
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 producersRead More
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
The annual update of Coface's Political Risk Index, published in the Coface Q3 Barometer, highlights a dual trend: on the one hand, a decrease in the risk of conflict at a global level, but on the other, an increase in the risk of political and social fragility. The latter is exacerbated in the countries most exposed to the coronavirus pandemic.
German companies want to cash in as early as possible, according to the fourth edition of Coface’s survey on corporate payment experience in Germany, conducted in July and early-August 2020, with 753 participating companies located in Germany.
Unsurprisingly, COVID-19 and its effects on the global and German economy is the predominant topic of this survey. One major finding is that German companies are getting worried: companies became cautious in providing payment terms to their clients and less companies are offering payment terms overall and these have shortened, even drastically in some sectors.
The COVID-19 health crisis has had a negative impact on short-term global renewable energy development, and challenges remain in the medium- to long-term, according to a recent Coface study.
Renewables have strengthened rapidly in the last 20 years, particularly in power generation, increasingly gaining market share from traditional energy sources such as coal, oil, and nuclear. The COVID-19 crisis has had a significant impact on this segment of the energy sector, as the pandemic disrupted supply chains and labour availability. Access to funding was also hit hard. These recent trends have affected projects that had already been approved, as well as other projects in the pipeline
This study is the very first Coface survey on corporate payment experience in the Netherlands. Originally, this survey had been conducted between February and early-March 2020 (the first quarter of 2020, Q1 2020), with 301 participating companies located in the country. However, at the end of the survey period, COVID-19 struck the world and changed the economic outlook drastically. Accordingly, in order to factor in this change of companies’ payment experience, we conducted a new survey between early-May and late- June (the second quarter of 2020, Q2 2020), in which 114 companies participated. The results differ remarkably within these few months. Admittedly, some might be due to the different set of participants, but others mirror the new economic status-quo.Read More
Here are the main points addressed in this Coface study:
A favourable context
Foreign trade and inclusion in supply chains had already increased for Central & Eastern European (CEE) in recent years, boosted by most of its countries’ decision to join the European Union (EU) in 2004.
• An educated workforce
• Geographical proximity to Western Europe
• Low labour costs
• Relatively good infrastructure
• A stable business climate
• Improving productivity through greater use of automation and "robotization".
Coface does not expect the sector to recover to fourth quarter 2019 level before 2022.
In Coface’s central scenario, the turnover of listed companies of the global transport sector will be 32% lower in the 4th quarter 2020 and 5% lower in the 4th quarter 2021 than in the 4th quarter 2019.
In the hypothesis of a second wave of the pandemic in the 3rd quarter of 2020, the turnover would be 57% lower in the 4th 2020 and 27% lower in the 4th 2021.
The impact of COVID-19 is all the more important since economic activity was already slowing down before the crisis.
As the COVID-19 epidemic hits the United States very hard, Coface forecasts in its baseline scenario that the country's GDP will contract by 5.6% in 2020, before rebounding by 3.3% in 2021. Nevertheless, this forecast is threatened by the resurgence of the outbreak in several states, which are already pausing or even reversing the resumption of activity after the extensive lockdown of April.Read More
After a 2019 that was dominated by trade tensions between the United States and China, Coface has observed an incipent recovery in Asia (excluding China), supported by supply chain shifts and additional liquidity from the US Federal Reserve . Average payment terms improved in 2019, rising to 67 days compared to 69 days in 2018. And while 65% of companies reported experiencing payment delays in 2019 (63% in 2018), the average payment duration decreased to 85 days in 2019, down from 88 days in 2018.Read More
Although the second quarter of 2020 is shaping up to be the most challenging period of the year, there are now good reasons to think that the road to recovery will be long and arduous. Despite immediate tax deferrals, liquidity guarantees, it is likely that many firms will find themselves in difficulty.
According to Coface forecasts, Spain and Italy will be among the economies hardest hit by COVID-19, contracting by 12.8% and 13.6% respectively in 2020. Corporate insolvencies are expected to increase by 22% in Spain and 37% in Italy by 2021, relative to 2019 levels. For 2021, Coface forecasts that Spain and Italy’s GDP will rebound by 10.2% and 8.9%, leaving the economies 3.9% and 5.9% below 2019 levels.
The economic consequences of the COVID-19 pandemic are of an unprecedented scale in Europe. The twin supply-demand shock has resulted in the halting of production (at least partially) in many companies as employees cannot go to work and in a fall in consumption because of mobility restrictions. The decline in revenues has deteriorated companies’ cash positions, fostering an increase in payment delays – and, ultimately, payment defaultsRead More
A few weeks after the first containment easing measures, economic activity seems to be picking up in most European countries. However, about two months after China, this gradual and partial recovery will not erase the effects of containment on global growth.
In this context, Coface forecasts that the recession in 2020 (a 4.4% drop in world GDP) will be stronger than that of 2009. Despite the recovery expected in 2021 (+5.1%) – assuming there is no second wave of the coronavirus pandemic – GDP would remain 2 to 5 points lower in the United States, the eurozone, Japan, and the United Kingdom, when compared to 2019 levels.
Our survey shows a deterioration in payment behaviour in 2019, which ultimately does not bode well for Chinese companies in the context of weaker activity in 2020. Coface expects growth to fall to 1.0%, the lowest level in 30 years, so given the historic correlation between economic activity and payment delays, we anticipate a sharp deterioration in 2020.Read More
Early 2020 marked by a sudden interruption in world trade, hampered by a global recession and soaring uncertainty
The global recession is expected to coincide with a sharp decline in international trade this year, especially as international trade tends to decline more than GDP in times of crisis. However, the extent of this overreaction is difficult to measure. The World Trade Organization (WTO) forecasts a 13-32% decline in world trade. This estimate indicates that all regions would suffer a double-digit decline in their trade volumes.