One in five UK businesses report that late payment problems have worsened in the past year. New research from Premium Credit shows that late payment issues remain a significant concern for UK SMEs. 20% of firms report a growing problem with late payments, and 5% indicate that the issue has become much worse. The study identified that one way SMEs manage cash flow is switching to monthly insurance payments instead of one-off payments. SMEs have also run down their savings, with 28% saying they have fallen since the start of the cost of living crisis. To read Premium Credit's news release, go to https://www.premiumcredit.com/news-and-events/late-payment-issues-are-easing-for-smes.​

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Profit Warnings in Q2 2024 increased by more than 20% compared to Q1. InfolinkGazette's Quarterly Report for Q2 2024 has shown that the number of profit warnings continues to cause concern. Profit Warnings in Q2 2024 increased by more than 20%, from 113 in Q1 2024 to 139 in Q2 2024. Worryingly, InfolinkGazette's data also demonstrates a significant increase in the number of "going concern" or "material uncertainty" events being recorded as the primary reason for a profit warning. Also, despite indications that the number of insolvencies being filed is beginning to flatten out, numbers remain elevated at levels considerably higher than those seen in previous years. To read InfolinkGazette's news release, go to https://www.techcitylabs.com/resources/infolink-gazette-quarterly-report-q2-2024?utm_source=linkedin&utm_medium=posttcl&utm_campaign=rpt-q22024.

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​Major causes of small business insolvencies. Londonlovesbusiness has reported that, according to Purbeck Insurance Services, bad debts and payment disputes are a top cause of business insolvency. According to Purbeck's analysis, a common theme among directors is an overconcentration on one or more customers who are late payers. Other major causes of busines failure in the past year included failed acquisitions and not being close to business financials due to an over-reliance on accountants. To read Londonlovesbusiness' article, go to https://londonlovesbusiness.com/major-causes-of-small-business-insolvencies/

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UK company insolvencies in June 2024 were 13% higher than in May. New data from Creditsafe has found that 2,390 companies in the UK became insolvent in June 2024 – a 13% increase compared to May and 6% higher than the same month in 2023. 16% of insolvencies in June came from within the UK construction sector. The total number of UK company insolvencies for 2023 was 30,199. This number represents a 12% increase compared to the same period in 2022 and a 52% increase compared to 2021. To read Creditsafe's news release, go to https://www.creditsafe.com/gb/en/blog/reports/insolvencies.html.

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Compared to pre-pandemic levels, May 2024 figures indicate a 48.8% increase in insolvencies. Latest data from the Insolvency Service has found that corporate insolvencies in England and Wales decreased by 6.4% in May 2024 (to 2,006) compared to April. This is, in turn, a decrease from May 2023's figure of 2,547. However, compared to pre-pandemic levels in May 2019 (1,348), May 2024 figures indicate a 48.8% increase in insolvencies. Tim Cooper, President of R3, commented that corporate insolvencies are higher than they were in May 2019 because CVL levels are significantly higher now than they were then, "as a greater number of directors are closing their businesses after four tough years of trading during and post-pandemic." To read R3's news release, go to https://www.r3.org.uk/press-policy-and-research/news/more/32117/page/1//.

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High credit risk and rising insolvencies plague the UK construction sector in 2024. Tokio Marine HCC has published a report on the UK construction sector, highlighting that credit risk remains high in 2024, with business failures and late payments rising. Insolvency figures have increased for three consecutive years, with the sector now accounting for 17.4% of all UK insolvencies. Small profit margins and fixed-price contracts hinder the ability to pass unexpected costs to customers, exacerbating financial strain. Additionally, failures of larger companies are impacting smaller businesses down the supply chain, causing project delays. Late payments are prevalent, with 20% of invoices paid late affecting smaller firms' cash flow. To read Tokio Marine HCC's report, go to https://www.tmhcc.com/en/news-articles/thought-leadership/trade-credit-uk-construction-sector-report-2024.

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UK Economy & Exports

The UK economy grew by more than initially estimated in Q1 2024. The Office for National Statistics (ONS) has estimated that UK GDP grew by 0.7% in Q1 2024, revised up from a first estimate increase of 0.6%. This follows falls in the previous two quarters. Compared with the same quarter a year ago, GDP is estimated to have increased by 0.3%. In output terms, services grew by 0.8% in the quarter, with widespread growth across the sector. The production sector grew by 0.6%, while the construction sector fell by 0.6%. To read the ONS' news release, go to https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/quarterlynationalaccounts/januarytomarch2024.

Licensed under the terms of Open Government. Licence v3.0.

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The UK economy is turning a corner amid softer global growth. According to the latest KPMG Global Economic Outlook, following a technical recession in the second half of 2023, the UK economy has shown tentative signs of renewed momentum. KPMG now expect GDP growth of 0.5% this year (revised up from 0.3%), followed by 0.9% in 2025. According to the outlook, the fiscal reality is similar for whichever party wins the general election on 4 July. KPMG also forecasts that global growth will slow from 2.7% in 2023 to 2.5% in 2024 before rebounding to 2.7% next year. To read KPMG's news release, go to https://kpmg.com/uk/en/home/media/press-releases/2024/07/uk-economy-is-turning-a-corner-amid-softer-global-growth.html.

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UK business conditions, measured by sales and cashflow improved in Q2, returning to pre-pandemic levels. The BCC's latest Quarterly Economic Survey shows measures of UK business confidence and business conditions slightly improved in Q2 2024, albeit from a very low base. 38% of firms (compared with 36% in Q1) said they had seen an increase in domestic sales over the previous three months, while 43% reported no change and 20% a decrease. After a static picture in Q1, business confidence has also increased slightly in Q2. 58% of UK firms say they are expecting an increase in turnover over the next year – an increase of 2% compared to Q1. 29% expect no change and only 13% expect a decrease. To read the BCC's news release, go to https://www.britishchambers.org.uk/news/2024/07/bcc-quarterly-economic-survey-business-confidence-continues-to-tick-up-in-q2/.

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The UK is heading "for calmer waters". Coface's UK economist, Jonathan Steenberg, has advised that there are welcome signs that the UK is finally headed "for calmer waters", while, in Ireland, it seems to be a case of "slow and steady". Coface forecasts UK growth of 0.6% in 2024 and 1.1% in 2025 and has left its country risk rating unchanged at A4 (reasonable). While Ireland is expected to see slower growth, its risk assessment remains A3 (satisfactory). To read Coface's news release, go to https://www.coface.uk/news-economy-and-insights/coface-q1-2024-barometer-an-overview-from-our-uk-economist-jonathan-steenberg.

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UK retail sales fell faster than expected in June following May's modest recovery. According to the latest CBI Distributive Trades Survey, UK retail sales volumes fell faster than anticipated in the year to June, reversing a return to modest growth last month. Sales were reported to be well below average for the time of year (-39% from +2% in May). Alpesh Paleja, CBI Interim Deputy Chief Economist, commented that unseasonably cold weather in June may have played a role, "but it's notable that internet retail sales fell sharply in our survey, too." To read the CBI's news release, go to https://www.cbi.org.uk/media-centre/articles/retail-sales-fell-faster-than-expected-in-june-following-mays-modest-recovery-cbi-dts-june-2024/.

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A record number of Indian-owned businesses in the UK saw their revenue increase by at least 10%. The 11th edition of the Grant Thornton India Meets Britain report has reported that 971 Indian-owned businesses are operating in the UK (up from 954 in the previous year), contributing significantly to the UK economy. Those who have reported two years of consistent accounts achieved an average annual growth rate of 24%, with the top-performing 100 companies achieving an average revenue growth rate of 48%. Of these, the three fastest-growing companies are Interglobe Enterprises (UK) Ltd (323%), SAR Overseas Ltd (319%), and Sterlite Technologies UK Ventures Ltd (244%). To read Grant Thornton's news release, go to https://www.grantthornton.co.uk/news-centre/Revenues-soar-for-top-Indian-owned-companies-in-the-UK/.​

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Lending to SMEs by UK high street banks grew in Q1 2024. UK Finance has released its latest Business Finance Review, which reports on lending to and deposits held by UK SMEs in the first quarter of 2024. The Review indicates that further growth in business lending from high street banks occurred at the start of 2024, following an increase at the end of 2023. Q1 2024 saw a 15% increase compared with the previous quarter. At just over £4 billion, this was 8% higher than the same period in 2023. While most regions in the UK saw this growth, the most significant increases in new lending to SMEs took place in the East Midlands, London and the North East. To read UK Finance's news release, go to https://www.ukfinance.org.uk/news-and-insight/press-release/lending-smes-high-street-banks-grew-in-q1-2024.

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Global: Late Payment, Insolvencies & Economy

The world economy is above the waterline. Coface's latest Barometer indicates that the world economy has shown slight improvement in Q1 2024 from previous years affected by the pandemic, the Russia-Ukraine conflict, and the US banking crisis. Coface has upgraded its global growth forecast for 2024 to 2.5%, with stabilisation at 2.7% expected in 2025. Moderate growth in the US and China is anticipated to be offset by acceleration in several emerging countries. Coface also noted that Europe, with a GDP growth of 0.3% in Q1 2024, seems to be out of recession. However, continued inflation reduction to around 2% may come at the cost of deteriorating labour markets and corporate margins, potentially increasing insolvencies. To read Coface's news release, go to https://www.coface.com/news-economy-and-insights/country-and-sector-risks-barometer-turbulence-ahead.

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Faster-than-expected growth in the global economy, though the extent of growth remains modest. D&B's latest Economic Outlook for the first half of the year reports a nascent recovery appears to be taking hold in parts of the world, though strength varies by region. The Eurozone and the UK both rebounded in Q1, though economic activity remains lacklustre, and both are moving on from short-lived and shallow recessions. In comparison, growth in the US remains strong, though there are signs that economic activity is slowing down. Several large emerging economies, such as the Chinese Mainland, India, Indonesia, Brazil, and Mexico, have also recorded upbeat outturns so far this year. D&B expects this variance in recovery prospects to continue, with generally softer outcomes in developed economies, particularly in Europe, offset by relatively stronger performances in the US and emerging economies. To read D&B's Outlook, go to https://www.dnb.co.uk/perspectives/finance-credit-risk/country-risk-global-outlook.html.

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Belgian exporters are cautious about their growth potential over the next three years. Credendo has advised that its ninth Export Barometer 2024 indicates "the considerable resilience" of Belgian exporters. Because of this resilience they remain relatively optimistic, despite the growing number of sources of tension and risks (particularly on the geopolitical front). Regarding export activities, there has been little change in Belgian businesses' main export markets. Neighbouring countries (cited by 79% of exporters) far outstrip the rest of the EU (32%). Regarding intercontinental exports, the US and Canada (16%) remain in first place, ahead of Asia (15%). To read Credendo's Export Barometer, go to https://credendo.com/sites/default/files/media/files/2024-06/Credendo_WHITE_PAPER_EN_2024_V2_Final.pdf.

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Upcoming political outcomes will test resilience again. Allianz Trade's Mid-year Economic Outlook 2024-25 predicts global GDP growth of +2.8% in 2024 and 2025, with growth slowing to +1.7% in the US and reaching potential in the Eurozone at +1.4% in 2025. China will also continue to manage its growth slowdown (+4.3% in 2025). However, risks remain tilted to the downside, given heightened uncertainty in a super-election year and ongoing global conflicts. Allianz Trade cautions that its downside scenario (fiscal slippage & rising geopolitical risks) would mean -1.5pp lower global growth and +1pp higher inflation, which would keep interest rates higher for longer. To read Allianz Trade's news release, with a link to a presentation, go to https://www.allianz-trade.com/en_global/news-insights/economic-insights/Mid-year-Economic-Outlook-2024-25.html.

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The global economy is on track for a soft landing. Atradius' latest Economic Outlook suggests that the global economy is on track for a soft landing and a recession has been avoided. Compared to six months ago, global GDP projections for 2024 have been revised upwards by 0.5% to 2.6% due to a surprisingly resilient US economy, and the global economy is likely to also improve further in 2025 with 2.8% growth. Advanced economies are expected to grow by 1.6% in 2024, while the outlook for emerging market economies, though weak by historical standards, is stronger than that for advanced economies – with 3.9% and 4.0% growth predicted in 2024 and 2025, respectively. In addition, Atradius forecasts that global trade growth will improve to 2.5% in 2024 and 3% in 2025. This comes after a downbeat 2023, when trade shrank by 1.2%. To read Atradius' news release, go to https://atradius.co.uk/reports/economic-research-economic-outlook-july-2024.html.

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Global growth is stabilising but at a weak pace. The World Bank's latest Global Economic Prospects report has found that, despite an improvement in near-term prospects, the global outlook remains subdued by historical standards. In 2024-25, growth is set to underperform its 2010s average in nearly 60% of economies, comprising over 80% of the global population. By the end of this year, one in four developing economies will be poorer than it was on the eve of the pandemic. However, there are some notable exceptions. The US economy, in particular, has shown resilience, with US dynamism is one reason the global economy enjoys some upside potential over the next two years. India's economy has been buoyed by strong domestic demand and is projected to grow an average of 6.7% per fiscal year from 2024 through 2026 – making South Asia the world's fastest-growing region. To read the World Bank's report, go to https://www.worldbank.org/en/publication/global-economic-prospects#overview.

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The EU economy is in the doldrums due to the lack of a strong industrial policy. Allianz Trade has published a report, 'Industrial policy: old dog, new tricks?', which argues that the absence of a strong industrial policy is causing the European economy to fall further and further behind China and the US. The report suggests that rather than developing policies based on its own strengths, the billions it invests are mainly used "to limit its backwardness". Allianz Trade argues that this is "a dead end" and the EU's industrial policy is "a balancing act gone too far". In the report, Allianz Trade argues in favour of a European industrial policy focused on innovation ecosystems, with 'horizontal' policies that target specific themes. To read Allianz Trade's news release, with a link to the full report, go to https://www.allianz-trade.com/en_BE/news/latest-news/eu-economy-suffers-from-weak-industrial-policy.html.

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Global goods trade sees 1% growth in the first quarter of 2024 after a plateau in 2023. According to the latest trade statistics released by the WTO, merchandise trade – as measured by the average of exports and imports – was up 1.0% in Q1 2024 compared to the previous quarter. If the current pace of expansion continues through the end of this year, trade volume for the whole of 2024 will be 2.7% higher than in 2023. Trade in the first quarter was also up 1.4% compared to the same period in 2023. Most regions contributed positively to the upturn in trade volume, with Europe remaining a notable exception as its exports and imports continued to decline. To read the WTO's news release, go to https://www.wto.org/english/news_e/news24_e/stat_02jul24_e.htm.

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Although European companies are waiting on receivables of at least €10.5 trillion, fewer companies feel their growth is being held back by late payment. Intrum's latest Payment Report indicates that European countries are currently waiting on receivables of at least €10.5 trillion – close to the GDPs of France, Germany and the UK combined. However, the proportion of companies that suggest that their growth over the last year has been held back by issues with late payments has fallen – from 43% to 33%. And just 15% of businesses say bad debt is a growing problem. That said, Intrum warns that it "would be a mistake to be complacent"; insolvencies rose sharply in many parts of Europe last year – by 52% and 35% in the Netherlands and France, respectively, for example – and are predicted to increase again in 2024. To read Intrum's report, go to https://www.intrum.com/media/ddnher2l/intrum-epr-2024.pdf.

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Credit Management: Resources

​Credit Management software for industry and trade. SCHUMANN's credit management software enables businesses to automate all the processes that they need to achieve their profit and liquidity targets – from a creditworthiness check to dunning and debt collection. SCHUMANN's solution offers benefits, including:

• Businesses know their risks at all times. This enables them to initiate the right avoidance strategies and safeguarding measures at the right time.

• Credit management becomes more efficient. Credit Managers are relieved from routine work and can use their expertise for more value-creating activities.

• The automation of (part) processes enables fast and secure credit limit decisions.

• Portfolio analyses are available at the press of a button enabling a constant overview.

For more information, go to https://prof-schumann.com/en/cam-industry-and-trade.​

 

Company Watch launches its new fraud detection software, Vigilance™. Vigilance™ leverages advanced algorithms to analyse Companies House filings. By monitoring 15 critical triggers, Vigilance™ identifies unusual activity and inconsistencies, enabling users to spot potential fraud, enhance risk assessments and automate risk identification saving time and resources. Craig Evans, CEO of Company Watch, said: “In today's complex business environment, fraudsters are constantly evolving their tactics. Our new fraud detection software empowers professionals to stay ahead of the curve by providing them with the tools they need to quickly identify and address potential fraud attempts.” More information on Vigilance™ can be found here: https://www.companywatch.net/business-fraud-vigilance/

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Free service provides Prompt Payment Reports and insight into payment culture in the UK. The Good Business Pays website has a free facility that enables users to enter a company's name to receive a Prompt Payment Report detailing the average time the company takes to pay invoices, the volume of invoices it pays late, its performance in comparison to other companies, and the payment terms it offers. Users of the website are also encouraged to submit their own data based on past trading experience. In late 2021, the service introduced an annual Good Business Pays Fast Payer Award for companies that demonstrate good practices in fast and on-time payments to their smaller suppliers over time. The service has accredited nearly 300 companies this year with its Fast Payer Award. For more information, go to https://goodbusinesspays.com/.

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CrewStudio enables businesses to create and publish low-cots, high-impact videos quickly. CrewStudio is an innovative, award-winning mobile app that allows companies to publish low-cost, top-quality, high-impact videos quickly for internal communications, sales, marketing and social media amplification. The video is then edited according to the client's brief (and revised as necessary) by the CrewStudio team. A white-label version of CrewStudio can also offer clients a complete digital video production platform. Go to https://wtvglobal.com/crewstudio/ for details.

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Events & Professional Development

​SCHUMANN Conference on Digital Credit Risk Management, 12 September. online via live stream.

Our SCHUMANN Conference on Digital Credit Risk Management will take place online on 12 September. Experts from our customer and partner base will present their use cases and report on current challenges and the best strategies.

We are not limiting ourselves to one industry, because we are convinced that valuable insights and inspiration for you lie in cross-industry dialogue. That's why, in addition to financial service providers, industrial and wholesale companies, credit and surety insurers will also have their say!

Don't miss the keynote speeches by Janet Henry, Global Chief Economist at HSBC and Christiane von Berg, Head of Economic Research BeNeLux & DACH at Coface.

Register now! Participation is free of charge.

We look forward to seeing you!

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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.

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.

The following courses have been planned for Q3/4 2024:

• 11 September: Fundamentals of Trade Credit Insurance*

• 24 & 25 September: The Trade Credit Insurance Advanced Course**

• 8 & 9 October: The Surety Bonds Foundation Course**

• 10 & 11 October: The Surety Bonds Advanced Course**

* Webinar

** Classroom

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The courses are hosted by very experienced experts from the industry and there is plenty of opportunity for asking questions, discussion and networking. There is also the possibility of arranging in-house training (at your own offices or at a venue of choice) with a tailor-made program based on the training needs of your company. 

Detailed information about the webinar and classroom training courses is available on Stecis’ website: www.stecis.org. Also, further information can be obtained by sending an e-mail to info@stecis.org.

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About this month's sponsor: SCHUMANN 

At SCHUMANN we optimise the management of risk for credit, surety, political risk insurers and export credit
agencies. Our software solutions and risk models are setting the future technological standards for the industry.

We are an open minded and learning organisation which invests heavily in research and development, often with our partners at the University of Goettingen. We aim to stay ahead of the competition with our cutting edge technology.
We value our independence, and are happy to work with any data provider or partner of your choice. We favour long term partnerships. We invest all of our resources into our customer relationships, and as a result have never lost a customer in our 25 year history.
CAM Credit and Surety enables our customers to automate risk assessment and underwriting processes, while
our artificial intelligence handles complex workflows with ease, enabling customers to remain compliant with their regulatory environment.
A SCHUMANN software solution is both future proof and the most robust on the market – it will provide decades of service and will never let you down.