Welcome to the April 2023 issue of Credit Management News Digest.
This month's issue is sponsored by Markel.
Index
UK Late Payment, Business Distress & Insolvencies
UK SMEs are owed an average of £250,000 in late payments.
New data from Time Finance has revealed the worsening challenge of late payment debt as it finds UK SMEs are owed an average of a quarter of a million pounds in outstanding invoices. In a recent survey, Time Finance uncovered
that one in three businesses is forced to wait between 60 and 120 days for invoices to be paid by their customers. Phil Chesham, Managing Director of Invoice Finance at Time Finance, commented: "£250,000 is a significant figure,
and for many businesses is unlocked potential. That capital, if it's in their bank account where it should be, can help a business pay its staff and its mounting bills, giving them the room to look beyond survival towards future growth,
whether that's through new tech, developing skills or improving sustainability."
To read Time Finance's news release go to https://timefinance.com/press-releases/smes-owed-an-average-of-250k-in-late-payments-finds-time-finance.
60% of UK businesses say it's taking longer for customers to pay their invoices compared to a year ago. New research published by Bibby Financial Services (BFS)
reveals the extent to which the UK's MEs are exposed to substantial debt stress today. The average bad debt amongst UK SMEs has jumped 61% — from £10,329 in Spring 2022 to £16,641 today, and currently,
around 1.5 million (or 27% of UK SMEs) are struggling with this issue. BFS also found that 47% of businesses surveyed have seen at least one business customer cease to trade in the last six months, and 25% have
seen three or more customers become insolvent. Derek Ryan, UK Managing Director of Bibby Financial Services, commented: "We may have narrowly avoided recession, but economic conditions remain incredibly volatile,
especially for SMEs. Not only are SMEs grappling with the perennial issue of late payment and rising levels of bad debt, they are also struggling to access the finance they need to operate day-to-day."
Click here to read BFS's news release.
Late payments 'stifle' small businesses, report shows.
The Federation of Small Businesses (FSB) has released a report that uncovers the true scale of damage caused by the late payments crisis.
The report finds that 52% of UK businesses experienced late payment in 2022, with 25% reporting an increase.
The most affected sectors include education, construction, administrative, professional, scientific, transportation, IT, arts and human health and social work.
The report also highlights the impact of late and delayed payment on small businesses and the public's expectations around prompt payment.
FSB Policy Chair Tina McKenzie said:
"Big businesses shouldn’t be using small firms as a bank. It's time for them, too, to step up and take responsibility for poor payment practices."
To read the FSB's news release go to https://www.fsb.org.uk/resources-page/time-is-money-late-payments-stifle-small-businesses-report-shows.html.
UK food supply chain late or failed payment claims up 79% as the sector faces 'quadruple threat'. Atradius has reported that it saw a 79% increase in claims for late and failed payments in the food sector last year.
Agriculture supply chains are particularly suffering, with a 119% rise in claims in 2022. For 2023, Atradius warns that the 'quadruple threat' of rising prices, the ongoing fallout from Brexit and the pandemic,
as well as bad weather could see insolvencies soar in the sector. Georgios Panzaris, Senior Underwriter at Atradius, commented: "Companies that have traditionally operated on thin margins will be particularly vulnerable
to volatile market conditions, but even the biggest players are being tested."
Atradius advises that it continues to underwrite agri-food firms on a case-by-case basis. Click here to read Atradius' news release.
Profit warnings in Q1 2023 more than doubled compared to the same period last year.
A new analysis from InfolinkGazette shows a notable increase in insolvencies and profit warnings this quarter.
Q1 2023 saw the number of reported profit warnings rise from 96 in Q4 2022 to 122 in Q1 2023, an increase of 19% — and 64% higher than the number in Q1 2022.
In addition, InfolinkGazette has found notable increases in notices of Intention to Appoint an Administrator (323 in Q1 2023 vs 251 in Q4 2022) and Appointment of an Administrator (216 in Q1 2023 vs 195 in Q4 2022).
Initial Stage Winding Up Petitions also continued on an upward trajectory, with the increase driven by filings actioned by HMRC. S. Kaler, Head of Data & Operations at InfolinkGazette, commented: "At the end of Q1 2022, just 10% of all Winding up Petitions had been brought by HMRC, that figure increased to nearly 30% by the end of 2022. In Q1 2023 filings actioned by HMRC made up 41.5% of all winding up petitions."
To read InfolinkGazette's news release go to https://www.infolinkgazette.co.uk/#press.
Corporate insolvencies increased by 160.3% compared to February 2021.
The latest data from the Insolvency Service has found that corporate insolvencies rose by 6% in February 2023 to a total of 1,783 compared to January's total of 1,682,
and increased by 17.5% compared to February 2022's figure of 1,518. Corporate insolvencies also increased by 160.3% from February 2021's total of 685 and by 32.6% from February 2020's total of 1,345.
Nicky Fisher, Vice President of R3, commented: "Corporate insolvency numbers are at their highest level in four years due to a rise in Creditors' Voluntary Liquidations.
Numbers for this process are higher than in 2022, 2021, 2020 and 2019 as more and more directors are choosing to close their businesses."
To read R3's news release go to https://www.r3.org.uk/press-policy-and-research/news/more/31577/page/1//.
UK company insolvencies increased by 32% in March compared to February 2023. New data from Creditsafe has found that 3,409 companies in the UK became insolvent in March 2023 — an increase of 32% compared to the previous month and an increase of 13% compared to the same month in 2022.
17% of insolvencies came from within the UK construction sector. According to Creditsafe, this brings the total number of UK company insolvencies for 2023 to 7,111.
This number represents an 11% increase compared to the same period in 2022 and a 78% increase compared to 2021. Creditsafe warns that two sectors that traditionally see large numbers of business failures and are worth keeping under review are Wholesale and Retail,
which saw 348 companies become insolvent in March, and Accommodation and Food Services, where 316 businesses failed. The combined total of these sectors represents 29% of all insolvencies.
To read Creditsafe's news release go to https://www.creditsafe.com/gb/en/blog/reports/insolvencies.html.
Prolonged increase in UK insolvencies for the next two years.
Allianz Trade's latest Global Insolvency Report has reported that the UK was among the countries that saw notable double-digit rises in insolvencies in 2022, with an increase of 51% — although from a low baseline in 2020/2021.
The research also predicted that business insolvencies will increase by +16% this year to reach 28,500 in total, with 31,100 (+9%) insolvencies in 2024.
Maxime Lemerle, Lead Analyst for Insolvency Research at Allianz Trade, commented: "Domestic firms have had to deal with a fragile situation amid a sharp growth deceleration, earlier monetary tightening and rapid inflation in addition
to specific Brexit-related issues."
To read Allianz Trade's news release, with a link to the full report, go to https://www.allianz-trade.com/en_global/news-insights/news/allianz-trade-insolvency-report.html.
UK Economy & Exports
The UK economy looks set to shrink by 0.3% in 2023.
The IMF's latest World Economic Outlook (WEO) notes that although the IMF has upgraded its previous prediction that the UK would experience a -0.6% contraction in growth in 2023
(forecast in January 2023), the UK is still set to be one of the most impacted advanced economies in the current global slowdown. UK output is now expected to contract by -0.3% this year before rebounding to grow by 1% next year.
This prediction places the UK at the bottom of the G7 nations, with Germany the only other country set to see a decline in growth (-0.1% in 2023) this year.
To read the IMF's WEO, with a press conference presentation of results, go to https://www.imf.org/en/Publications/WEO/Issues/2023/04/11/world-economic-outlook-april-2023.
UK GDP grew by 0.3% in January 2023, after falling by 0.5% in December 2022.
The latest release from the Office of National Statistics (ONS) estimates that monthly UK GDP grew by 0.3% in January 2023, after falling by 0.5% in December 2022.
Monthly GDP is now estimated to be 0.2% below pre-COVID levels (February 2020). The services sector grew by 0.5% in January 2023, after falling by 0.8% in December 2022,
with the largest contributions to growth coming from education, transport and storage, human health activities, and arts, entertainment and recreation activities, all of which rebounded after falls in December 2022.
However, production output fell by 0.3% in January 2023, following growth of 0.3% in December 2022. The construction sector also fell by 1.7% in January 2023 after being flat in December 2022.
To read the ONS' news release go to https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/january2023.
Licensed under the terms of Open Government. Licence v3.0.
Licensed under the terms of Open Government. Licence v3.0.
The UK economy faces underlying headwinds.
According to the latest KPMG Global Economic Outlook, the UK economy proved to be more resilient than expected at the end of 2022, but the squeeze on household incomes and the impact of past interest rate increases will likely
derail short-term momentum, with UK growth expected to be negative this year at -0.3% and only 0.6% in 2024. KPMG also estimates that while the impact of strikes subtracted around 0.1% from underlying growth in Q4 2022,
it will subsequently boost UK growth in the following quarter as the disruption unwinds and the impact on the volume of activity fades.
Household consumption will likely be a major headwind in 2023, with a fall of 0.4% expected, while higher prices continue to drag on real incomes (although inflation is set to fall sharply this year).
Globally, KPMG is forecasting GDP growth of 2.1% in 2023 and 2.6% in 2024, with inflation forecast at 5.3% in 2023 and 3.2% in 2024.
To read KPMG's news release go to https://kpmg.com/uk/en/home/media/press-releases/2023/03/uk-economy-faces-underlying-headwinds.html.
The UK economy will shrink in 2023 before rebounding.
The British Chambers of Commerce (BCC) forecasts the economy will not return to its pre-pandemic size until the final quarter of 2024.
In the immediate term, the BCC is now expecting the first quarter of 2023 to see GDP fall before three-quarters of flat or weak growth — leading to an overall contraction of 0.3% for the year.
This is a slightly more optimistic outlook than either the OBR or the Bank of England's predictions. The BCC also expects the economy to grow in 2024, at 0.6%, compared to the BoE's forecast of 0.25% shrinkage.
The expectation for 2023 has been revised upwards from -1.3% in the BCC's last forecast. To read the BCC's news release go to https://www.britishchambers.org.uk/news/2023/03/bcc-economic-forecast-economy-to-shrink-in-2023-before-rebounding.
UK mid-sized businesses outperform FTSE and smaller businesses.
According to new research from BDO, the UK's mid-sized businesses have outperformed the FTSE 350 and smaller businesses in the last year. Despite a challenging economic climate, mid-market businesses with revenues between £10 million and £300 million, AIM listed, and private equity owned businesses, what BDO calls the economic engine,
grew turnover by 12% to £1.5 trillion in the last year.
This compares to overall turnover growth of 10% for FTSE 350 businesses and a reduction of more than a third (36%) in turnover for smaller businesses,
defined as those with less than £10 million in revenues.
In London, turnover in mid-sized businesses grew by 17% in the last year. In comparison, mid-sized businesses in the North East experienced smaller turnover growth of 9%.
To read BDO's news release go to https://www.bdo.co.uk/en-gb/news/2023/mid-sized-businesses-outperform-ftse-and-smaller-businesses.
Middle market businesses are demonstrating remarkable resilience, but 'slowcession' is still a risk.
RSM's latest Middle Market Business Index has shown that middle market businesses are demonstrating remarkable resilience. According to the findings, middle market leaders are more positive about the economic outlook
compared to last quarter's data, with 39% saying the economy has already improved and 54% expecting it to improve over the next quarter — a significant jump up from 38% last quarter.
Thomas Pugh, economist at RSM UK, commented: "The good news is the anticipated recession will be mild by historical standards.
The overall drop in GDP will probably be around 1%. That's around half the size of the early 1990s recession, significantly smaller than the global financial crisis, and a fraction of the pandemic when GDP fell by a massive 22%.
This means the next year will feel more like a 'slowcession' than a typical recession." To read RSM's news release go to https://www.rsmuk.com/news/resilient-businesses-to-rebuild-margins-as-economic-outlook-improves-slowcession-still-a-risk.
New analysis shows UK productivity lags behind G7 contemporaries.
New research from PwC UK indicates that the UK has seen a significant dip in productivity growth since the Global Financial Crisis (GFC). In addition, productivity in the UK now lags behind its G7 contemporaries.
However, there are sectoral differences in productivity growth, with the slowdown in manufacturing productivity playing a significant role in the fall in economy-wide productivity.
Nick Atkin, Leader of Industrial Manufacturing and Services at PwC UK, commented: "In the decade prior to the GFC, UK productivity levels increased by more than one-fifth (21%).
While in the last decade, productivity levels increased by just over one-twentieth (7%). This is equivalent to a @75% slowdown in the rate of productivity growth.
The UK is not alone in seeing subdued productivity growth since the crisis, with the US and the other advanced economies also experiencing slowdowns in their productivity growth.
But the UK slowdown has been more dramatic."
To read PwC's news release go to https://www.pwc.co.uk/press-room/press-releases/new-analysis-shows-uk-productivity-lags-behind-g7-contemporaries.html.
America is the no.1 non-European market for UK small firms.
The US tops the list for UK small businesses to trade with outside Europe, according to new research by the Federation of Small Businesses (FSB). A majority (59%) of UK small exporters sell goods to the US
— their most popular non-European export market — followed by Australia (44%) and Canada (36%). The US is also the top origin market for small UK importers outside Europe, with more than a third (32%) saying they buy goods from the US.
China is placed second (30%), just before India (9%).
To read the FSB's news release go to https://www.fsb.org.uk/resources-page/fsb-lays-foundation-for-further-uk-us-trade-opportunities-as-new-study-shows-america-no-1-non-european-market-for-uk-small-firms.html.
£10 billion boost to UK Export Finance support.
UK Export Finance has been granted an extra £10 billion of capacity to drive more UK exports, raising its maximum exposure limit from £50 billion to £60 billion. In 2021-22, UKEF provided £7.4 billion in financing to exporters of all sizes.
UK Export Finance has also advised that his new capacity will help build on the £7 billion of support UKEF has provided for sustainable projects since 2019.
UKEF CEO Tim Reid said: "This is fantastic news for the UK companies that we are here to support. It means we can help more British businesses export and will enable us to support more jobs and help to fuel growth."
To read EKEF's news release go to https://www.gov.uk/government/news/british-businesses-set-to-benefit-from-10-billion-boost-to-uk-export-finance-support.
Two-thirds of UK exporters report non-EU trade gains.
According to a new report by Deloitte, although 74% of participants businesses surveyed whose businesses traded in Europe saw a negative impact on EU trade due to Brexit, 66% of businesses trading in the EU and the rest of the world experienced gains in non-EU markets.
35% of those businesses recouped their EU losses entirely, and a further 31% reported regaining some of their EU trade. A similar proportion (32%) reported making no compensating gains outside of the EU, rising to 46% for small businesses.
The results suggest that businesses are generally optimistic about the UK’s trade prospects over the next decade. 51% of those surveyed expect the UK’s free trade agreements to positively impact economic growth over the next ten years,
with 21% expecting a negative impact.
At least half of respondents anticipate that agreements with Australia (52%), New Zealand (51%) and India (50%) will be positive for their business.
To read Deloitte's news release go to https://www2.deloitte.com/uk/en/pages/press-releases/articles/two-thirds-of-businesses-report-non-eu-trade-gains--despite-brex.html.
UK Business Confidence & Retail
UK SMEs remain positive, but continuing challenges around costs, recruitment and the broader economic climate may impact future opportunities.
BVA BDRC's latest quarterly SME Finance Monitor provides an overview of how UK SMEs are feeling as the impact of the pandemic wanes (although not for all SMEs) and examines the response to further challenges being faced,
including increased costs, the new trading arrangements with the EU, recruitment and the broader economic environment. When first asked in Q2 2020, 68% of SMEs saw the pandemic as a major barrier to their business.
Since then, the impact has declined steadily to 12% in Q4 2022. Similarly, in Q2-4 2020, 40% of SMEs expected their future income to be either severely reduced or non-existent, but by 2022, 10% of all SMEs expected such a reduction.
To download BVA BDRC's report go to https://www.bva-bdrc.com/wp-content/uploads/2023/03/BVABDRC_SME_FM_Q4_2022_Management_Summary-FINAL.pdf?
The gap between store openings and closures narrows to its smallest since 2016.
A report released by the Local Data Company (LDC) indicates continued recovery overall for the GB retail and leisure market.
The analysis, which covers retail and leisure market performance over 2022, reveals that the gap between store openings and closures has narrowed to its smallest since 2016.
The overall vacancy rate also experienced a notable boost, ending the year at 13.8%. This represents a decline of 0.6% on 2021 — the greatest year-on-year decrease since LDC records began in 2013.
Lucy Stainton, Commercial Director, Local Data Company, commented: "Happily, as the year progressed, we were charting some of the most positive statistics we have seen since 2016, namely the largest decrease
in vacancy rates in a given period and the fewest net closures."
To read LDC's news release go to https://www.localdatacompany.com/blog/press-release-the-gap-between-store-openings-and-closures-narrows-to-its-smallest-since-2016.
Despite an uptick in business confidence, most firms in the UK see no improvement to sales.
The BCC's Quarterly Economic Survey (QES) for Q1 2023 shows that while business confidence has improved from a very weak base, most firms see no improvement to business conditions.
The survey of over 5,200 firms — 92% of whom are SMEs — reveals a sectoral division in business performance, with hospitality and retail firms consistently more likely to report worsening cash flow,
investment, and turnover than other sectors.
The research found that the percentage of firms reporting increased domestic sales has not seen any bounce back since it fell significantly in Q3 2022.
Only one in three (34%) firms experienced an increase in sales over the past three months, while 24% reported a decrease and 41% reported no change.
The retail and hospitality sectors remain particularly weak. To read the BCC's news release go to https://www.britishchambers.org.uk/news/2023/04/bcc-quarterly-economic-survey-despite-uptick-in-business-confidence-most-firms-see-no-improvement-to-sales.
UK manufacturing bounces back as clouds lighten.
According to the latest Make UK/BDO Q1 Manufacturing Outlook survey, Britain's manufacturers are seeing a rebound in activity in the first quarter of the year as the domestic and global markets have improved, easing fears of a significant recession for the industry this year. The findings show a marked pick-up on the picture in the final quarter of 2022. The improvement is driven mainly by strong demand in the electronics and mechanical equipment sectors, with the balance of orders, particularly in the electronics sector (+64%), extremely strong. However, despite the improvement this quarter, Make UK and BDO caution against the worst conditions being over and are forecasting a contraction for manufacturing in 2023 as the substantial challenges the sector faces show few signs of abating.
Read BDO's news release at https://www.bdo.co.uk/en-gb/news/2023/manufacturing-bounces-back-as-clouds-lighten-make-uk-bdo-survey.
Global Economy
The IMF warns that the global economic outlook is uncertain. The IMF's latest World Economic Outlook (WEO) notes that tentative signs in early 2023 that the world economy could achieve a soft landing — with inflation coming down and growth steady — have receded. Assuming that the recent financial sector stresses are contained, the IMF now predicts that global growth will fall from 3.4% in 2022 to 2.8% in 2023 before rising slowly and settling at 3.0% — the lowest medium-term forecast in decades. Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7% in 2022 to 1.3% in 2023. In an alternative scenario with further financial sector stress, global growth will decline to about 2.5% in 2023, with advanced economy growth falling below 1%. To read the IMF's WEO, with a press conference presentation of results, go to https://www.imf.org/en/Publications/WEO/Issues/2023/04/11/world-economic-outlook-april-2023.
Global insolvencies look set to rise by +21% in 2023 and +4% in 2024.
Allianz Trade's latest Global Insolvency Report predicts that after a small rebound in 2022 (+2%), the global rebound in business insolvencies is set to jump by +21% in 2023 and +4% in 2024.
Half of the countries analysed are likely to exceed their pre-pandemic levels of insolvencies in 2023 and three out of five in 2024.
Maxime Lemerle, Lead Analyst for
Insolvency Research at Allianz Trade, commented: "Inside Europe, we expect the number of insolvencies to reach 59,000 in France in 2023 (+41% y/y), 28,500 in the UK (+16%), 17,800 in Germany (+22%)
and 8,900 in Italy (+24%). In the US, we expect an increase of +49% in 2023 as a result of tighter credit conditions and an expected sharp economic slowdown,
which would mean a return to 20,000+ insolvencies per year. In Asia, China should see a moderate increase (+4%)."
To read Allianz Trade's news release, with a link to the full report, go to https://www.allianz-trade.com/en_global/news-insights/news/allianz-trade-insolvency-report.html.
Global Economic Outlook: slightly more optimistic but fragile, says OECD. On the back of improved business and consumer confidence, declining food and energy prices and the re-opening of the Chinese economy, the OECD's latest
Interim Economic Outlook projects global growth to reach 2.6% in 2023 and 2.9% in 2024. Annual GDP growth in the US is projected at 1.5% in 2023 and 0.9% in 2024 as monetary policy moderates demand pressures.
In the euro area, growth is projected to be 0.8% in 2023, but pick up to 1.5% in 2024 as the drag on incomes from high energy prices recedes. Growth in China is expected to rebound to 5.3% this year and 4.9% in 2024.
"The outlook today is slightly more optimistic than our previous forecasts, though the global economy remains fragile," OECD Secretary-General Mathias Cormann commented.
OECD (2023), Economic outlook: slightly more optimistic but fragile, says OECD, OECD, https://www.oecd.org/newsroom/economic-outlook-slightly-more-optimistic-but-fragile.htm.
Global trade growth to slow to 1.7% in 2023.
The World Trade Organization (WTO) has predicted that global trade growth in 2023 will be subpar despite a slight upgrade to GDP projections since last Autumn. The volume of world merchandise trade is expected to grow by 1.7% this year, following 2.7% growth in 2022, a smaller-than-expected increase that was pulled down by a sharp slump in the fourth quarter. The 1.7% forecast for trade growth in 2023 is up from last October's previous estimate of 1.0%. A key factor here is the relaxation of COVID-19 pandemic controls in China, which is expected to unleash pent-up consumer demand in the country, in turn boosting international trade. Looking ahead to 2024, WTO economists expect trade growth of 3.2% (as GDP picks up to 2.6%) but stress that this estimate is more uncertain than usual due to the presence of substantial downside risks.
To read the WTO's news release go to https://www.wto.org/english/news_e/news23_e/tfore_05apr23_e.htm.
Global business activity confidence reaches a one-year high.
The S&P Global Business Outlook Survey has indicated a revival in global business confidence in early 2023. The net balance of companies worldwide predicting a rise in business activity over the coming year recovered sharply in February,
rising to +32% from just +17% in the prior survey conducted in October last year. The improvement pushed confidence to a one-year high and a level broadly in line with the series average, having been among the lowest on record in the
previous survey period.
The improvement in sentiment was driven mainly by those economies that saw the largest drop-offs in confidence towards the end of 2022.
To read S&P Global's news release go to https://www.pmi.spglobal.com/Public/Home/PressRelease/31d326f21a0747a68f46ac529cc7e51f.
G20 GDP growth slows sharply to 0.3% in the fourth quarter of 2022.
GDP in the G20 area grew by only 0.3% quarter-on-quarter in the fourth quarter of 2022 according to OECD provisional estimates, compared with 1.4% in the previous quarter.
This slowdown ended a volatile year for the G20 area, in which GDP growth moved from 0.7% in Q1 2022 to minus 0.2% in the second quarter, before rising and falling again in the third and fourth quarters.
The downturn in the G20 area in Q4 2022 and the previous volatility in 2022 mainly reflected trends in China, which accounted for almost one-quarter of the G20's total GDP.
Growth in China fell from 3.9% in Q3 2022 to zero in Q4 as the easing of COVID-19 restrictions was accompanied by a rapid spread of infections which affected various sectors of the economy.
GDP growth also slowed or turned negative in most other G20 countries in Q4 2022. OECD (2023), G20 GDP Growth - Fourth quarter of 2022, OECD, OECD, https://www.oecd.org/newsroom/g20-gdp-growth-fourth-quarter-2022-oecd.htm.
Atradius warns that the global economy is on the edge of recession.
Atradius has published its annual results for 2022 and, looking forward, forecasts that global growth will falter in 2023 as the global economy teeters on the edge of a recession in the first half of the year.
Atradius cautions that this picture is especially true for advanced economies, with a 0.2% growth forecast overall and even a mild recession forecast in the Eurozone, US and UK. However, the outlook for emerging economies is more upbeat —
with 2.9% growth predicted overall, and some markets such as China and India forecast to perform better. In 2023, insolvencies in most markets will adjust to normal, pre-pandemic levels.
To read Atradius' news release go to https://group.atradius.com/press-release/atradius-annual-results-2022.html.
The eurozone and the UK avoided a recession in 2022, but headwinds remain.
Dun and Bradstreet's (D&B) latest Country Risk and the Global Outlook report suggests that GDP growth figures confirmed that, although the global economy held up better than expected in 2022 — both the eurozone and the UK avoided a recession
in 2022 ("albeit by a whisker") — headwinds remain. North America and Western & Central Europe's regional outlook is maintained as 'deteriorating', and D&B expects growth to lose momentum in the first half of 2023.
D&B also notes that insolvencies in the EU rose 27% in the last quarter of 2022, relative to the third quarter, while business liquidations in the UK are substantially higher than in pre-pandemic years,
consolidating a trend that started in 2021.
To read D&B's report go to https://www.dnb.co.uk/perspectives/finance-credit-risk/country-risk-global-outlook.html.
Global insolvencies will increase sharply as normality returns. Atradius has warned that it expects insolvencies to increase by 49% globally in 2023, driven by continued normalisation after the pandemic and the bankruptcy of zombie firms.
Rising insolvencies are anticipated across all regions, with North America experiencing a relatively strong increase while Europe is seeing milder increases.
Increases in business failures in South Korea (154%), Italy (90%), Hong Kong (83%), New Zealand (82%), the Netherlands (79%) and the US (74%) are expected to be particularly notable.
In 2024, the picture is more mixed, with global insolvencies forecast to rise by 12% compared to 2023 and relatively high insolvency increases in New Zealand (62%), South Korea (35%) and Singapore (30%). To read Atradius' news release go to https://group.atradius.com/publications/economic-research/insolvencies-increase-sharply-as-normality-returns.html.
Is the global outlook improving or deteriorating?
Coface's economist, Jonathan Steenberg, has published an article discussing the global economic outlook.
Jonathan explains that although the economic outlook seems brighter than the second half of 2022, the basic fundamentals for companies remain troublesome with demand falling,
and the general economic picture in the large economies (with the exception of India) looks set to be one of stagflation in 2023.
While the UK economy avoided recession in 2022, he notes that there's little doubt the UK will experience a downturn in 2023, and Coface anticipates that corporate insolvencies will rise across the board.
While all sectors will be affected, the challenges will be most acute within construction, metals, and other pro-cyclical and energy-intensive industries.
To read the article go to https://cofaceitfirst.co.uk/panorama-overview-of-the-economy/.
Events & Professional Development
Receivables Finance International Convention 2023, 23-24 May. London.
22 May Awards Dinner.
The 23rd annual Receivables Finance International Convention (RFIx23) is the industry’s leading event, attracting delegates from across the globe; bringing together market leaders and new entrants; providing an essential update on the latest invoice financing trends, market challenges, and financial innovation; as well as excellent networking opportunities.
22 May Awards Dinner.
The 23rd annual Receivables Finance International Convention (RFIx23) is the industry’s leading event, attracting delegates from across the globe; bringing together market leaders and new entrants; providing an essential update on the latest invoice financing trends, market challenges, and financial innovation; as well as excellent networking opportunities.
Keynote presentations and panel sessions include:
- The outlook for global trade and its impact on trade finance.
Marc Auboin, Economic Counsellor, Economic Research and Statistics Division, World Trade Organization. - Global zombies – an alternative type of corporate resiliency.
Professor Edward I. Altman, Director of Research, Credit and Debt Markets, NYU Salomon Center for the Study of Financial Institutions. - Panel session: Market development and business model evolution.
Moderator: Steve Box, Founder and Managing Director, Kata Executive Consulting. Panellists: James Binns, Managing Director, Global Head of Trade & Working Capital, Barclays; Mencia Bobo, Global Head Trade and Working Capital Solutions, Santander Corporate & Investment Banking; Parvaiz Dalal, Managing Director, Global Head of Payables Finance, Treasury and Trade Solutions, Citi; Ian Duffy, Founder and CEO, Accelerated Payments. - Panel session: Regulation and digitalisation – opportunities and challenges.
Moderator: André Casterman, Managing Director, Casterman Advisory; Chair of Fintech Committee, ITFA Panellists: Jon Boran, Director, Trade Innovation & Solution Development, Lloyds Bank; Jonathan Williams, Head of Transactional Legal; Demica Markus Wohlgeschaffen, Managing Director, Traxpay; Geoffrey Wynne, Partner, Sullivan & Worcester. - Fireside chat: Greensill Capital – the story behind the billion-dollar scandal.
Duncan Mavin, Editor and Columnist, The Washington Post; Author, The Pyramid of Lies: Lex Greensill and the Billion-Dollar Scandal. Interviewed by: Federico Travella, Founder & Executive Chairman, Novicap
TXF Global 2023: Export, Agency & Project Finance, 15-16 June. Lisbon, Portugal.
TXF Global 2023 returns to Lisbon for a very special 10 Year Anniversary edition!
Your largest export, agency & project finance event is returning to Lisbon for the second year running! We bring you this innovative, unique and ultimate networking gathering which is absolutely crucial if you work in this industry.
Let the festival commence! Expect:
For more information go to https://www.txfnews.com/events/266/TXF-Global-2023-Export-Agency-Project-Finance.
TXF Global 2023 returns to Lisbon for a very special 10 Year Anniversary edition!
Your largest export, agency & project finance event is returning to Lisbon for the second year running! We bring you this innovative, unique and ultimate networking gathering which is absolutely crucial if you work in this industry.
Let the festival commence! Expect:
- Exclusive networking activities from the hugely popular Lisbon walking tour, to ice-breaker drinks & cocktail reception
- ECA & DFI CEO hot seat: 1-1 fireside leadership interviews
- Corporate CEO keynote: Navigating economic turmoil to enable a greener future
- Tomorrow’s borrowers: The investment landscape & project pipeline
- Dedicated Uxolo Development & Impact Finance content stream
- TXF at 10: Legendary panelists from TXF Paris 2013 return to the stage to review the last 10 years of export finance and plot what this means for the next 10 years
- Delegate list of all those on-site so you can arrange meetings in advance + 1-to-1 dedicated meeting spaces, and separately bookable meeting rooms
- Even more time and space to network, attend private meetings and take part in intimate roundtables
- TXF Subscriber Exclusive: Watch all sessions on-demand, or enjoy the full event virtual-only from the comfort of your office chair!
For more information go to https://www.txfnews.com/events/266/TXF-Global-2023-Export-Agency-Project-Finance.
Professional Development
STECIS, the Trade Credit Insurance & Surety Academy endorsed by ICISA, offers a range of
webinars and classroom training courses.
Classroom training courses are organised once or twice per year or on demand while webinars are organised multiple times per year or on demand for groups of participants. For 2023 the following courses are scheduled)*.
** Possibility to register ends on the 16th of April 2023.
*** Registration is open until 1st of September 2023.
All classroom courses will take place in the Steigenberger Airport hotel close to Schiphol Airport/Amsterdam the Netherlands. The courses include the lunches and a dinner at the end of the first training day.
The courses are hosted by very experienced experts from the industry and there is enough opportunity for asking questions, discussions and networking.
Also there is the possibility to arrange an inhouse training: then there will be created a tailor made outline for your staff on basis the training demand of your of your company. The training will be effected at your own offices or at a venue of choice.
Details information about the webinar and classroom training courses are available on the Stecis’ website: www.stecis.org also further information can can be obtained by sending an e-mail to info@stecis.org.
Classroom training courses are organised once or twice per year or on demand while webinars are organised multiple times per year or on demand for groups of participants. For 2023 the following courses are scheduled)*.
- 14 June: Fundamentals of Trade Credit Insurance (Webinar)
- 26 & 27 September: the Trade Credit Insurance Foundation Course**
- 28 & 29 September: the Advanced Trade Credit Insurance Course**
- 15 June 2023: Masterclass TCI – Buy now, Pay later (Webinar)
- 10 & 11 October: the Surety Foundation Course***
- 12 & 13 October: the Surety Advanced Course***
** Possibility to register ends on the 16th of April 2023.
*** Registration is open until 1st of September 2023.
All classroom courses will take place in the Steigenberger Airport hotel close to Schiphol Airport/Amsterdam the Netherlands. The courses include the lunches and a dinner at the end of the first training day.
The courses are hosted by very experienced experts from the industry and there is enough opportunity for asking questions, discussions and networking.
Also there is the possibility to arrange an inhouse training: then there will be created a tailor made outline for your staff on basis the training demand of your of your company. The training will be effected at your own offices or at a venue of choice.
Details information about the webinar and classroom training courses are available on the Stecis’ website: www.stecis.org also further information can can be obtained by sending an e-mail to info@stecis.org.
About this month's sponsor: Markel
Credit is vital to the commercial world. Markel’s global solutions promote trade by ensuring that
buyers and sellers can do business with confidence. We offer a wealth of experience in trade
credit, political risk and surety covers, to control counterparty payment default, expropriation,
confiscation and performance risks.
Markel's team offers expert knowledge of commercial counterparty and sovereign covers across a wide spectrum of trade sectors. The key benefits for clients include security of non-cancellable credit and country limits, balance sheet and cash flow protection, improved terms for bank financing facilities, effective alternatives to letters of credit or other types of collateral, reduced need for bad debt reserves, fulfilment of capital adequacy requirements, increased potential for sales growth and security of performance obligations — all because the risks are hedged and secured on a firm foundation.
The team has extensive experience of providing global solutions for clients, but can also tailor policies for specific credit risks, markets and contingencies. As a result of the complexity of our clients’ risks spanning political, cultural, legal and social differences, it is crucial to choose an insurer who understands all of the facets of international and domestic trade, combined with a detailed understanding of available solutions across a variety of contexts and geographies.
Markel's team offers expert knowledge of commercial counterparty and sovereign covers across a wide spectrum of trade sectors. The key benefits for clients include security of non-cancellable credit and country limits, balance sheet and cash flow protection, improved terms for bank financing facilities, effective alternatives to letters of credit or other types of collateral, reduced need for bad debt reserves, fulfilment of capital adequacy requirements, increased potential for sales growth and security of performance obligations — all because the risks are hedged and secured on a firm foundation.
The team has extensive experience of providing global solutions for clients, but can also tailor policies for specific credit risks, markets and contingencies. As a result of the complexity of our clients’ risks spanning political, cultural, legal and social differences, it is crucial to choose an insurer who understands all of the facets of international and domestic trade, combined with a detailed understanding of available solutions across a variety of contexts and geographies.
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All news stories on Credit Insurance News' website are included with the prior permission of the copyright holder. Reproduction or redistribution in whole or in part, in any manner, without the express prior written consent of the copyright holder, is a violation of copyright law. If you, or your organisation wish to redistribute, republish or link-to all or any part of any Credit Insurance News Digest, you must first contact the copyright holder direct or email sally.brown@creditinsurancenews.co.uk for further information.
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