Nearly 70% of global corporates are paid between 30 and 70 days. For the third edition of its Global Survey, Allianz Trade recently surveyed over 3,000 exporters from China, France, Germany, Italy, Poland, Spain, the UK, and the US and found that nearly 70% of corporates globally are being paid between 30 and 70 days. Furthermore, in the context of lower growth, trade disruptions and geopolitical uncertainty, 42% of corporates expect the length of export payment terms to increase in the next six to twelve months. "This is in line with our forecast for global business insolvencies to rise by +9% this year", commented Aylin Somersan Coqui, CEO of Allianz Trade. To read Allianz Trade's news release, with a link to the full report, go to https://www.allianz-trade.com/en_GB/insights/economic-research/global-trade-survey-2024.html.

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Hospitality and food-related industries are among the UK's worst for payment practices. According to a new analysis by Good Business Pays, hospitality and food-related industries are among the UK's worst in paying suppliers on time, with an average time to pay across the industry of 46 days. In contrast, the technology and communications sectors are among the best when settling invoices on time. Terry Corby, CEO of Good Business Pays, says of the findings: "Thousands of small businesses are being held back by a systemic poor payment culture that has developed in the UK over decades, causing at least 50,000 business closures each year according to the FSB." To read Good Business Pays' news release, go to https://goodbusinesspays.com/posts/hospitality-among-uks-worst-sectors-for-payment-practices/.

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Bad debts stand at an average of 7% of all B2B sales in the UK. Atradius' 2024 Payment Practices Barometer survey for the UK has found that there has been a change in payment policies among companies in the UK electronics/ICT and consumer durables sectors, with longer payment terms (averaging a couple of months from invoicing) being offered to B2B customers. According to Atradius' research, late payments currently affect 40% of B2B sales across all sectors in the UK, while bad debts stand at an average of 7% of all B2B sales. To read Atradius' news release, with a link to the full report, go to https://atradius.co.uk/reports/payment-practices-barometer-b2b-payment-practices-trends-united-kingdom-2024.html.

 

18.7% of all UK-listed companies issued a profit warning over the last 12 months. According to EY-Parthenon's latest Profit Warnings report, although there has been a quarterly fall in the number of profit warnings, 18.7% of all UK-listed companies issued a profit warning over the past 12 months. Furthermore, EY-Parthenon's research found that the number of companies warning for the first time in 12 months recently reached its highest level since Q1 2022, with 61% of companies in Q1 2024 issuing a 'new' warning. By the end of the first quarter of 2024, 39 companies had issued three or more warnings over the last 12 months, with just over a fifth of these companies delisting – or in the process of doing so – due to insolvency or acquisition. To read EY's news release, go to https://www.ey.com/en_uk/news/2024/05/ftse-retailers-sector-issued-seven-profit-warnings.

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UK construction experienced more insolvencies than any other industry ​in the year to March 2024. RSM UK has reported that the number of registered company insolvencies in England and Wales was 2,177 in April 2024,  – 18% higher than in March 2024 and April 2023, respectively, and above levels seen during the pandemic. The construction industry experienced the highest number of insolvencies, reaching a total of 4,273. Commenting on the latest construction insolvency statistics, Kelly Boorman, National head of construction at RSM UK, said: " The industry has been seriously impacted by inflationary rates and labour costs, especially in the last year." To read RSM UK's news release, go to https://www.rsmuk.com/news/construction-insolvencies-continue-to-rise-amidst-growing-political-uncertainty.

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UK corporate insolvency numbers reach a level not seen since the previous recession in 2008-9. Latest data from the Office for National Statistics indicates that corporate insolvencies rose by 18.4% in April 2024 (to 2,177) compared to March. This was an increase of 52.7% compared to pre-pandemic levels in April 2019. Tim Cooper, President of R3 and a Partner at Addleshaw Goddard LLP, commented that both the last year and the last quarter have seen corporate insolvency numbers reach a level not seen since the previous recession in 2008-9. "The fact the UK had entered a recession (albeit relatively modest) during the last two quarters of 2023 was a contributing factor, however the recession would appear to have been short-lived with a better than expected growth in GDP of 0.6% between January and March which has largely cancelled out the recession itself." To read R3's news release, go to https://www.r3.org.uk/press-policy-and-research/news/more/32066/page/1//.

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UK Economy & Exports

The UK economy recorded no growth in April. Latest data from the Office for National Statistics (ONS) has found that GDP is estimated to have shown no growth in April 2024, following growth of 0.4% in March 2024.
GDP is now estimated to have grown by 0.7% in the three months to April 2024 compared with the three months to January 2024. Services output grew by 0.2% in April 2024, its fourth consecutive monthly growth, and also grew by 0.9% in the three months to April 2024. Production output fell by 0.9% in April 2024 following growth of 0.2% in March 2024, but grew by 0.7% in the three months to April 2024. Construction output fell by 1.4% in April 2024, its third consecutive monthly fall, and fell by 2.2% in the three months to April 2024. To read the ONS' news release, go to 

https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/april2024.

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

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IMF upgrades its UK growth forecast for 2024 and 2025. In its annual check-up on the state of Britain's economy, the IMF has predicted that the UK economy is approaching a soft landing, with a recovery in growth expected in 2024 and strengthening in 2025. Growth was 0.6% quarter-on-quarter in Q1 2024, marking a stronger-than-expected exit from the technical recession in the second half of 2023, which left full-year growth at 0.1%. Real GDP growth is now forecast at 0.7% in 2024. The IMF also expects UK inflation to reduce to close to 2% in the coming months and suggests that UK interest rates should be cut to 3.5% by the end of next year. To read the IMF's statement, go to https://www.imf.org/en/News/Articles/2024/05/20/mcs052124-united-kingdom-staff-concluding-statement-of-the-2024-article-iv-mission.

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Slightly upgraded growth expectations for the UK economy in 2024 and 2025. The British Chambers of Commerce's (BCC) latest Quarterly Economic Forecast expects the UK economy to continue recovering after the short recession at the end of 2023, with growth for 2024 (0.8%) and 2025 (1%) revised upwards for the second consecutive forecast.  However, with global headwinds remaining, interest rates falling slowly and only a gradual expansion in consumer spending, the BCC expects UK growth to remain subdued – holding at 1.0% for 2026. While CPI inflation should dip below the Bank of England's 2% target this year, it is expected to rise again to 2.3% across Q4 2024. It is also forecast to be slightly above target in Q4 2025 at 2.1% and 2.2% in Q4 2026. To read the BCC's news release, go to https://www.britishchambers.org.uk/news/2024/06/bcc-economic-forecast/.

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The UK economy is "picking up steam". The latest CBI economic forecast points to encouraging signs that the UK economy is on track to gradually "pick up steam" over 2024 and 2025. After a strong start to the year, UK GDP growth is projected to rise to 1.0% in 2024. Momentum should then continue in 2025, with GDP growth anticipated to reach 1.9% – broadly in line with the average pre-COVID growth rate (2.0% between 2010-19). The CBI also expects inflation to decline to the Bank of England's 2% target in Q2 2024, before picking up slightly in the latter part of this year. In 2025, inflation is forecast to return to 2% more sustainably. To read the CBI's news release, go to https://www.cbi.org.uk/media-centre/articles/the-uk-economy-is-picking-up-steam-but-more-needs-to-be-done-to-achieve-sustainable-growth-cbi-economic-forecast/.

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Encouraging signs of some GDP growth, but trend growth remains anaemic. The National Institute of Social and Economic Research's (NIESR) latest UK Economic Outlook has suggested that the UK economy is recovering after the slight falls in GDP in the third and fourth quarters of 2023 (0.1 and 0.3%, respectively). That said, NIESR expects that the overall picture of low growth in the UK, which – barring the bounce back from the COVID-19 pandemic – we have seen for much of the past decade, will continue. NIESR forecasts GDP growth of 0.8% in 2024 relative to 2023. However, geopolitical events, such as the conflict in the Middle East, present a substantial downside risk and NIESR's view remains that the trend growth rate of UK GDP is only 1%. To read NIESR's news release, with a link to the Outlook, go to https://www.niesr.ac.uk/publications/pre-election-gloom?type=uk-economic-outlook.

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Positive Growth in Q1 2024 indicates an encouraging momentum. The National Institute of Social and Economic Research (NIESR) has reported that UK GDP grew by 0.4% in March, following a revised 0.2% growth in February. This monthly figure was mainly driven by increasing output in services sectors, particularly transportation and storage. GDP grew by 0.6% in the first quarter of 2024 relative to the previous three-month period – a stronger-than-expected growth than NIESR's last forecast. NIESR also expects that monthly GDP will continue its momentum in April, growing by 0.1% relative to March, driven by growth mainly in services and production – particularly agriculture. In the second quarter of 2024, GDP is forecast to grow by 0.6%, primarily driven by services sectors. To read NIESR's news release, go to https://www.niesr.ac.uk/publications/positive-growth-delivers-encouraging-momentum?type=gdp-trackers.

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Claims that Poland will be richer than the UK this decade are overambitious "but only just". Cebr has reported that Donald Tusk's recent statement that the Polish economy would be richer than the British by 2029 is overambitious "but only just". Poland is already 20th in the world in terms of GDP per capita and has seen the fastest expansion in Europe. Growth was trending at around 5% a year before the pandemic and grew by 10% between 2019 and 2022 despite the impacts of COVID-19. In contrast, UK growth has gradually "trended to a crawl" over the past thirty years. In 2022, the economy was only 1.7% larger than in 2019. However, a significant economic gap remains between the two countries: according to Cebr's World Economic League Table, Polish GDP per capita remained less than half that of the UK in 2023. To read Cebr's news release, go to https://cebr.com/reports/claims-that-poland-will-be-richer-than-the-uk-this-decade-are-overambitious-but-only-just/.

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UK flash PMI signals sustained economic recovery. S&P Global Market Intelligence has reported that flash PMI survey data for May signalled a further expansion of business activity halfway through the second quarter, suggesting the UK economy is continuing to recover from the mild recession seen late last year. GDP looks to rise by around 0.3% in the second quarter, with an encouraging revival of manufacturing accompanied by sustained but slower service sector growth. This growth follows official GDP estimations of a 0.6% rise in Q1. S&P notes that both the survey and official data point to a rebound from the shallow recession in the UK last year. To read S&P's news release, go to https://www.spglobal.com/marketintelligence/en/mi/research-analysis/flash-pmi-signals-sustained-economic-recovery-price-pressures-fall-to-lowest-in-over-three-years-May24.html.

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The economies of Wales and Scotland have hardly grown in recent years. Cebr has reported that the latest official data from the Office for National Statistics show that Scotland's economy was 0.7% smaller in 2022 than in 2019. The situation in Wales is worse; the latest official data showed that the Welsh economy was 1.8% smaller in 2022 than in 2019, making it the worst performer of any region or nation on this metric. Cebr notes that, given the fiscal arrangements of these two nations, it would be easy to point to devolution as a driver of their recent subpar performance. However, Northern Ireland, which also has devolved status, has performed strongly in recent years. To read Cebr's news release, go to https://cebr.com/reports/poor-economic-growth-to-leave-welsh-gdp-per-capita-1100-short-of-pre-pandemic-levels-this-year/.

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The current rise in small business confidence could signal the end of recession. According to FSB's Small Business Index (SBI) for Q1 2024, UK small business confidence has returned to positive territory for the first time in two years, the first evidence that the small business community has come out of the late 2023 recession. The headline confidence reading jumped over 20 points to reach +5.5 points in Q1 2024, up from -15.0 points in the final quarter of last year. Outside of COVID waves, this is the first confidence reading above zero since 2018. The gap in confidence readings among major sectors was also notably narrower compared to the previous quarter, showing a gentle rising tide across the whole economy. The most positive sector is manufacturing (+19.2 points), while the least positive is accommodation and food services (-11.8 points) – a 31-point difference. To read the FSB's news release, go to https://www.fsb.org.uk/resources-page/rise-in-small-business-confidence-could-signal-end-of-recession-new-report-finds.html.

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In the year to May, UK retail sales grew at their fastest pace since December 2022. According to the latest CBI Distributive Trades Survey, in the year to May, retail sales grew at their fastest pace since December 2022. Furthermore, selling price inflation in the retail sector eased considerably in May, to its lowest since August 2020. Although retailers expect sales to fall slightly next month, they should remain broadly in line with seasonal norms. Alpesh Paleja, CBI Lead Economist, commented: "May's increase in retail sales adds to the swathe of data pointing to an improvement in activity over the near-term. Falling inflation, and continuing real wage growth will contribute to a healthier consumer outlook, in turn supporting the retail sector further." To read the CBI's news release, go to https://www.cbi.org.uk/media-centre/articles/retail-sales-grow-at-their-fastest-pace-since-december-2022-cbi-dts/.

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Global: Late Payment, Insolvencies & Economy

Update on the Late Payment Regulation: Progress of draft text in the European Parliament. ICISA has advised that although it agrees that the ongoing issue of late payment negatively impacts European businesses, it believes that the proposals put forward by the European Commission are likely to fail to address the core reasons for this. ICISA stresses that fixing payment terms at thirty days ignores the fact that some sectors need to operate on more extended periods due to the nature of their business. Furthermore, ICISA warns that such an abrupt shift in payment terms "would result in a financing requirement for SMEs of circa EUR 2 trillion." ICISA notes that, while early indications appear to be that member states are concerned about the impact a regulation would have on existing mechanisms and judicial processes, it is not yet clear whether the Council's view will be to amend the proposal in a way that enables more flexibility in payment terms. To read ICISA's article, go to https://icisa.org/news/update-on-the-late-payment-regulation-progress-of-draft-text-in-the-european-parliament/.

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Across Europe, the average business is losing more than a quarter of the working year chasing late payments. According to the annual European Payment Report from Intrum, 34% of businesses suggest that they are more likely to request longer payment terms from suppliers or pay later than agreed, and a further 15% of businesses say they will begin extending payment terms in 2024. Businesses in Spain (20%) are the most likely to ask suppliers for longer payment terms, followed by Italy (19%), Portugal (18%), France (17%) and Denmark (17%). According to Intrum, across Europe, the average business is losing more than a quarter of the working year chasing late payments, and businesses are currently owed €10.5 trillion (30% of total GDP and equivalent to the combined GDP of France, Germany and the UK). To read Intrum's news release, go to https://www.intrum.com/press/press-releases/press-release-article/?id=68A05996D42B206D#Corporate_costcutting_at_a_fouryear_high_despite_growing_economic_optimism.

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Tentative signs of more durable growth are starting to consolidate in Western Europe. D&B's latest Global Economic Outlook finds that, although global growth this year is likely to be broadly in line with last year, tentative signs of durable growth are starting to consolidate in some regions. In Q1 2024, the German and French economies grew by 0.2%, Italy's by 0.3%, and Spain's economy expanded by 0.7% – gains which pushed the bloc back into positive territory following two quarters of contraction. Similarly, the UK appears to have exited a recession. However, data heading into Q2 will confirm whether this is the beginning of a sustained rebound. To read D&B's news release, go to https://www.dnb.co.uk/perspectives/finance-credit-risk/country-risk-global-outlook.html.

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20% more companies in Western Europe than last year report anxiety about a significant worsening of their Days-Sales-Outstanding (DSO). Atradius has published the key findings of the May 2024 edition of its Payment Practices Barometer for Western Europe, a survey based on feedback from approximately 3,000 domestic and export suppliers in fourteen markets and across eight sectors. The survey found that three in five businesses across Western Europe expressed concern about an increase in insolvencies in the year ahead, and around 20% more companies than last year reported anxiety about a significant worsening of their DSO. This is echoed by an upward trend in bad debts, currently accounting for an average of 8% of the total value of B2B sales on credit, up from 6% last year. To read Atradius' news release, go to https://group.atradius.com/press/press-releases/western-european-firms-face-working-capital-challenges.html.

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The eurozone's recession is over, with a Q1 GDP growth of 0.3%. According to a flash estimate published by Eurostat, the statistical office of the European Union, in the first quarter of 2024, seasonally adjusted GDP increased by 0.3% in both the Euro area and the EU compared with the previous quarter. This means the eurozone's shallow technical recession is over (GDP shrank by 0.1% in the third and fourth quarters of last year). It was also the eurozone's strongest quarterly growth since Q3 2022, driven by growth in Germany, France, Italy and Spain. Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 0.4% in both the euro area and the EU. To read Eurostat's news release, go to https://ec.europa.eu/eurostat/web/products-euro-indicators/w/2-15052024-ap.

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Q1 2024: EU businesses experience a decline in bankruptcies and a rise in registrations. According to new research by Eurostat, the number of bankruptcy declarations by EU businesses decreased by 0.8% in Q1 2024 compared with Q4 2023. At the same time, business registrations were up by 1.6% in Q1 compared with the previous quarter. While the overall number of bankruptcy declarations had slightly decreased, there were different trends across the sectors, with slight decreases in two sectors (trade (-3.3%) and construction (-1.2%)) and high increases in the transportation and storage sector (+15.2%). To read Eurostat's news release, go to https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20240516-1.

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Credit Management: Resources

Allianz Trade provides a digital-first payment solution for B2B e-commerce. Allianz Trade pay offers a payment solution that offers various services dedicated to B2B e-commerce activities. Benefits include an instant financing solution through Allianz Trade's partners, a digital buyer onboarding solution, an online fraud risk management and mitigation system, and trade credit insurance at checkout. Companies can easily integrate with their CMS through a plugin to the source code of their B2B e-commerce platform. François Burtin, Global Head of e-commerce at Allianz Trade, commented: "With Allianz Trade pay, we are now covering the entire B2B e-commerce value chain, from KYB to payment, and addressing the needs of the whole ecosystem, from e-merchants to BNPL players, banks and marketplaces." For more information about Allianz Trade pay, go to https://www.allianz-trade.com/en_global/news-insights/business-tips-and-trade-advice/AllianzTradepay-digital-first-payment-solution.html.

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Allianz Trade's Trade Match identifies the best export markets for companies across the globe. Allianz Trade offers a useful tool, Trade Match, which highlights the export risks and opportunities across 18 sectors in 70 markets around the world using a combination of historical data, proprietary country risk ratings, sector risk ratings, and Allianz Trade's trade forecasts. Users select where they are exporting from to discover which countries offer them the largest export opportunities. Users can also find out which sectors provide the best opportunities in each of the top destinations. For more information, go to https://www.allianz-trade.com/en_global/economic-research/online-tools/trade-match-exports.html.

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Events & Professional Development

SCHUMANN CONNECT, 26 June. London.
We are pleased to invite you to the SCHUMANN CONNECT event on June 26, 2024 from 5:00 pm. Registration is open from 4:30 pm. The event offers exciting information from the field of brokerage, trade credit and surety insurance solutions and the opportunity to exchange ideas with colleagues from the insurance industry.

Speakers from the following companies have already confirmed their participation:

• Howden

• TMHCC

• TigerRisk Partners

• Bondaval

Topics covered at the event include broker solutions and better conditions for gaining additional reinsurance capacity through software-based best practice solutions.

 

You can register here: https://info.prof-schumann.com/en/registration-schumann-connect.

Participation in the event is free of charge for you.

 

Date and time:

Wednesday, June 26, 2024, starting at 5 p.m.

 

Venue:

Cavendish Venue

1 America Square, 17 Crosswall

London EC3N 2LB

 

Become part of our unique SCHUMANN community and don´t hesitate to contact us if you have any questions.

We look forward to your participation!

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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: Allianz Trade 

As the global leader in trade credit insurance, Allianz Trade specialises in surety, collections, structured trade credit, and political risk. Our intelligence network tracks daily solvency changes in over 80 million companies worldwide, empowering businesses to trade securely and avoid bad debts.
We give companies the confidence to trade by securing their payments. Whilst we compensate businesses for bad debts, our primary goal is to help them avoid these debts altogether.
Our trade credit insurance and other financial solutions focus on predictive protection. And when the unexpected happens, first class service and AA credit rating, backed by Allianz, ensures we have the resources to provide compensation and keep your business running smoothly.

Discover insights for global export growth
To help businesses thrive globally, we polled over 3,000 exporters from the UK, France, Germany, Italy, Poland, Spain, China, and the US for the third edition of our Global Survey. These insights into trade risks and trends guide businesses through challenges and unlock growth opportunities.