AMSTERDAM, October 29, 2018
AMSTERDAM, October 29, 2018 /PRNewswire/ --
3 in 5 Western European suppliers reported financial distress on the business due to late payment
Although still positive, growth of Western European economies is forecast to slow to 1.7% in 2019 from 2% in 2018. With Brexit and protectionist measures, largely by the US, adding stress in export markets, businesses are already starting to experience an increased negative impact from late payment of invoices.
In the October 2018 edition of the Atradius Payment Practices Barometer for Western Europe, a survey based on feedback from approximately 3,000 domestic and export suppliers from 13 countries (Austria, Belgium, Denmark, France, Germany, Great Britain, Greece, Ireland, Italy, Spain, Sweden, Switzerland, and the Netherlands) more respondents than last year (58%, up from 56% one year ago) reported having experienced financial distress on their business due to late payment by their B2B customers.
On average, nearly 42% of the total value of B2B receivables of the Western European businesses surveyed was paid late. This compares to 41% one year ago. Domestically, suppliers surveyed in Italy and Greece were the hardest hit (on average, nearly half of the total value of their B2B invoices were overdue). The hardest hit by late payment from foreign customers were respondents in Great Britain and France (53% of the total value of British and 51% of French export sales on credit were reported to have been unpaid by the due date). Late payment from B2B customers is reflected in a longer DSO, which may adversely impact businesses' liquidity, increasing B2B trade credit risk. Based on the Atradius survey, over the past year, the biggest increases in DSO were recorded in the Netherlands (46 days, up from 41 days) and Great Britain (35 days, up from 31 days).
The Atradius Payment Practices Barometer for Western Europe also reports businesses' opinions about the biggest risks to global economic growth in the coming six months. 45% said that US protectionism turning into a trade war is the most likely to dampen economic growth in the upcoming six months. By country, the highest percentage of respondents believing that US protectionism may trigger a global trade war that hampers global growth was recorded in Denmark (60%).
Andreas Tesch, Chief Market Officer of Atradius N.V. stated, "The outlook for global growth is forecast to lose steam, warranting a more cautious outlook for 2019. This will likely put the brakes on the downward trend in global insolvencies with only a 1% decline forecast for next year. All this points to deterioration of the worldwide outlook for trade credit risk on the horizon. Protection of receivables is, therefore, of paramount importance for businesses. Credit insurance enables businesses to manage the inevitable risks of selling on credit, and can help them grasp growth opportunities through safe and profitable trade."
The complete report highlighting all findings of the October 2018 edition of the Atradius Payment Practices Barometer for Western Europe can be downloaded from the Atradius website at https://group.atradius.com (Publications section).
Atradius is a global provider of credit insurance, surety and collection services, with a strategic presence in over 50 countries. The credit insurance, bond and collection products offered by Atradius protect companies around the world against the default risks associated with selling goods and services on credit. Atradius is a member of Grupo Catalana Occidente (GCO.MC), one of the largest insurers in Spain and one of the largest credit insurers in the world. You can find more information online at https://group.atradius.com.
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