All Coface Publications
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.
At first, the COVID-19 epidemic in China only affected a limited number of value chains – but it has since turned into a global pandemic. Its repercussions have created a double shock – supply and demand – that is affecting a large number of industries in all over the world. The uniqueness of this crisis makes comparisons with the previous ones useless, as they all had financial origins (e.g. global credit crisis of 2008-09, great depression of 1929). The question is no longer which countries and sectors of activity will be affected by this shock, but rather which few will be spared.Read More
Turkey Payment Survey 2019: better picture in payment term but companies remain cautions regarding economic prospects
Right after the recession that the economy went into during the second half of 2018 the private sector remains mixed in terms of the economic outlook.
Payment terms: shorter terms reflect preference for liquidity
The deterioration of cash flow has slowed down and fewer companies expressed tougher conditions while making their payments. Nowadays, the average payment term offered by Turkish companies to their clients stood nearly at 85 days in the domestic market and at 69 days in export markets (vs 108 days in 2017).
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).
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.
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
• Consolidated sector revenues increased by 14%
• Over a third of the companies (40%) made investments in 2017
• Profitability ratios have remained at the same level as last year
• Over half of the companies in the sector are exposed to an insolvency risk above average
• The car fleet is obsolete, with 75% of the registered vehicles in use at the end of the year being older than 10 years, in line with the modest evolution of the infrastructure
• Over one third of the companies (43%) reported a decrease in revenues
For the current analysis, data were collected from 2,735 companies that submitted their financial data for 2016 and generated a consolidated turnover of RON 23.02 MLD. Companies in the analyzed sector (4639 Non-specialized Wholesale of Food, Beverages and Tobacco) recorded a positive revenue trend in 2016, rising by about 5% compared to 2015, and a slight increase in profitability compared to 2015.Read More