Business Information: Latest Reports and Business ShortsWorld Economic Forum quantifies the causal impact of Letters of Credit on US exports. Recent research by the World Economic Forum has found that changes in supply of letters of credit (LC) by US banks have a causal effect on US export growth. If the supply of LCs to a destination declines by 17% (one standard deviation) from the previous quarter, US exports to that country fall on average by 1.5%. Effects double in times of financial distress and are stronger for exports to small and poor countries. Furthermore during a crisis episode, the same decline in LC supply reduces US exports to small and poor countries by 5.8%. This is probably because firms are less willing to trade without an LC when shipping to high risk destinations and when uncertainty in the economy is high. To view the article go to
http://forumblog.org/2014/11/how-do-bank-guarantees-affect-trade/.ICM says new payment reporting proposals will protect small businesses and their cashflow. New proposals in the Small Business Bill to oblige large companies to publish detailed information about their payment practices and performance will enable small businesses to enter into trade relationships with their ‘eyes wide open’ according to the Institute of Credit Management (ICM). The proposed changes will oblige larger companies to report: their average payment time; the proportion of invoices paid beyond terms; and the proportion of invoices paid within 30 days, over 30 days, over 60 days and over 120 days. Reporting on a quarterly basis will be a mandatory requirement for all large and quoted companies. Business Minister Matthew Hancock said that tackling late payment is at the heart of the Government’s drive to help small businesses. To view the ICM's news release go to
http://www.icm.org.uk/icm-says-new-payment-reporting-proposals-will-protect-small-businesses-cashflow/.UK exporters remain steadfast despite a slowdown in global growth. The BCC and DHL Express have published new research which looks at the health of the UK’s export market and finds that in the latest quarter (Q3), fewer exporters reported increased sales, with almost a third (29%) of exporting businesses reporting that their export sales increased in Q3, compared to 47% in Q2 2014. The highest increase in exporting activity was seen in Wales, followed by Scotland and Yorkshire and the Humber. To view the BCC's news release go to
http://www.britishchambers.org.uk/press-office/press-releases/exporters-remain-steadfast-despite-slowdown-in-global-growth,-says-bcc-and-dhl-report.html.EEF finds that Britain's manufacturers have enjoyed a solid end to the year. Britain's manufacturers have enjoyed a solid end to the year with positive figures on output and orders according to the Q4 Manufacturing Outlook survey released by EEF. A buoyant domestic market has helped to secure the strongest annual growth rate across the sector this year since 2010. Commenting, EEF Chief Economist, Ms Lee Hopley, said: "2014 has proved to be a solid year for manufacturers with growth on track to exceed that for the economy overall. There have been some notable areas of strength this year, especially among sectors which rely on demand in the home market. Overall we should see a good balance of sectors and sizes delivering positive news." Overall growth prospects for this year have come in more or less in line with EEF's forecasts throughout the year at 3.5%, while 2015 will see a moderate deceleration in the annual rate of manufacturing growth to 2%. To view EEF's news release go to
http://www.eef.org.uk/about-eef/media-news-and-insights/media-releases/2014/dec/industry-ends-year-on-a-high.Tax professionals rank UK as the second most attractive European economy. A report by Deloitte has found that over 800 European tax professionals rank the UK and the Netherlands as the most attractive economies to operate in from a tax perspective. Respondents praised the UK’s competitive tax regime and the UK’s tax authority for its transparency and ease of compliance. They commended the Dutch tax authorities for their responsiveness, ease of communication, accessibility of information and clear and simple procedures which respondents feel favours entrepreneurs and economic growth. To view Deloitte's news release go to
http://www2.deloitte.com/uk/en/pages/press-releases/articles/tax-professionals-rank-uk-as-the-second-most-attractive-european-economy.html.The number of UK ‘Debut Directors’ hits an all-time high. The number of first-time business directors in the UK is at an all-time high, according to Experian data. Alongside a lower level of business experience, these ‘Debut Directors’ start-up with less investment than ever before and an increasing proportion come from backgrounds with lower than average levels of affluence. More than half a million businesses were created in the UK last year (515,000 in 2013, up 8.9% from 473,000 in 2012), with the proportion of first-time directors rising by 12.6% (304,000 in 2013 compared to 270,000 in 2012). Experian also found that business survival rates (businesses still trading two years after start-up) are also on the up year-on-year, from 76% in 2009, to 87% in 2011. Overall, 'Debut Directors' have a slightly lower chance of survival (84% compared to 87% survival rate in 2011). To view Experian's news release go to
http://press.experian.com/United-Kingdom/Press-Release/number-of-uk-debut-directors-hits-all-time-high.aspx.Use of invoice finance reaches all-time high in the UK. The third quarter of 2014 was the biggest ever for asset based finance, with a record £19.3 billion of funding provided to businesses, according to the Asset Based Finance Association (ABFA). This is a 12% increase on the £17.2 billion in use a year earlier. Businesses are now accessing 37% more in funding through asset based finance than the £14.1 billion they were at the height of the recession in December 2009. Evette Orams, Managing Director of Hilton-Baird Financial Solutions said: “The constantly changing funding landscape is prompting more businesses to recognise that cash is tied up in unpaid invoices and the assets held by their business." To view Hilton Baird's news release go to
http://www.hiltonbaird.co.uk/Business-Finance-Blog/369/Use-of-invoice-finance-reaches-all-time-high/.Retail sales remain resilient in run-up to Christmas - CBI survey. Retail sales remained resilient in the year to November, with the pace of growth expected to accelerate once again in the crucial Christmas run up, according to the CBI’s latest quarterly Distributive Trades Survey. Most sub-sectors saw growth in sales volumes, with grocers (+67%), furniture & carpets (+74%), and hardware & DIY (+54%) leading the way. Specialist food and drink saw sales fall on a year ago (-34%), as did clothing (-39%). Retailers expect their overall business situation to improve over the next three months (+6%), with the same balance of firms intending to raise investment in the year ahead (+6%). To view the CBI's news release go to
http://news.cbi.org.uk/news/retail-sales-resilient-in-run-up-to-christmas-cbi-survey/.D&B reports that the aggregate number of failures in the past four quarters is 16% lower than the previous four quarters. D&B has produced its latest quarterly industry report containing an overview of the key trends, industry failure rates, and payment information taken from D&B's knowledge of the UK trading universe and beyond. The report advises that D&B's data from Q3 shows a slight increase of 3.5% in the number of corporate insolvencies compared to Q2. However, this is still 26% lower then the corresponding quarter of 2013, a promising increasing trend. The aggregate number of failures in the past four quarters is also 16% lower than the previous four quarters (Q4 2012- Q3 2013) and 19% lower than the preceding quarters (Q4 2011 - Q3 2012). However, D&B caution that 'zombie companies' remain at risk if the benign and supportive business climate (notably low interest rates and creditor forbearance) changes, while an increase in failures is typically seen in the period after Christmas. To see D&B's full report go to
http://www.dnb.co.uk/dnb_files/Reports/RMS/UK_Report_Q3_2014_FINAL2.pdf.UK business demography 2013. The Office for National Statistics has released the following headline data (
see http://www.ons.gov.uk/ons/rel/bus-register/business-demography/2013/index.html):- The number of UK business births increased by 28.5% from 270,000 to 346,000 between 2012 and 2013.
- The number of UK business deaths decreased by 6% from 253,000 to 238,000 between 2012 and 2013.
- The total UK business birth rate was 14.1% and the death rate was 9.7%. London was the region with the highest birth rate at 17.9% and the highest death rate at 10.6%.
- In broad industry terms, business administration and support services had the highest business birth rate at 20.7% and finance and insurance had the highest death rate at 13.1%.
Source: Office for National Statistics licensed under the Open Government Licence v.3.0.Credit Insurance News Digests: SponsorshipSponsoring an issue of Credit Insurance News Digest is a great way to promote your company or brand to a committed audience of trade credit insurance professionals.
If you are interested in sponsoring an issue in 2015 see our
sponsorship page for further information.
