Icon

Directory

IconAccounting & Tax
IconActuaries
IconAdministrators
IconAppraisers & Valuers
IconArbitration Services
IconASIB
IconAssessors & Loss Adjusters
IconAssist and Lifestyle Benefits
IconAssociations & Institutes
IconAuditors
IconBBBEE Consulting and Verification Agencies
IconBroker Acquisition Financing
IconBrokers for Brokers
IconBusiness Process Management
IconBusiness Process Outsourcing
IconCall Centre Outsourcing & Sales
IconCompany Secretarial Services
IconCompliance
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDebit Order Collection Facilities
IconDefensive Driver Training
IconEducation and Training
IconEmergency Medical Rescue
IconFAIS
IconFire, Storm, Flood Damage Specialists
IconForensic Investigation Services
IconHuman Resources
IconIndustrial Cleaners
IconInformation Technology and Software Partners
IconInsurance Companies
IconLegal
IconLightning Damage & Surge Protection Specialists
IconNiche Insurance Products
IconOmbud
IconOutbound Sales
IconOutsourcing Companies
IconPolicy Administration
IconPremium Financing
IconPublic Loss Adjustors
IconPublications
IconRating Agencies
IconReference Books & Material
IconRegulatory Authorities
IconRisk Finance
IconRisk Management
IconRisk Surveyors
IconSalvage Operators
IconSpecialized Claims Investigations & Assessing
IconSurveys and Research
IconTraining Courses & Workshops
IconUnderwriting Managers
IconVehicle Accident Management
IconVehicle and Household Risk Inspection Services
IconVehicle Tracking
IconWellness Programs
IconWholesale Brokers
IconZZZZZZ
Image
  Subscribe To »

Asia Corporate Payment Survey 2019: Deteriorating payment trends amid trade war woes

Published

2019

Wed

10

Jul

 

Coface’s 2019 Asia Corporate Payment Survey covered over 3,000 companies in nine economies (Australia, China, Hong Kong, India, Japan, Malaysia, Singapore, Thailand and Taiwan). 63% of companies surveyed stated that they experienced payment delays in 2018. The length of payment delays increased to 88 days on average in 2018, compared to 84 days in 2017. The length of payment delays was highest in China, Malaysia and Singapore; as well as the energy, construction and ICT sectors.

 

Longer payment terms and more delays

 

Trade wars, slowing growth in the United States (U.S.) and Europe, Brexit and volatile global capital flows — businesses in Asia had to manage a number of political, economic and financial pitfalls last year. To better understand the impact that such events have on companies, Coface conducts annual corporate payment surveys across the world. The 2019 Asia Corporate Payment Survey covers nine economies in the Asia-Pacific region. For the survey, data was collected from over 3,000 companies during the fourth quarter of 2018.

 

The survey’s data shows that companies in Asia were under pressure last year to extend longer payment terms. Average payment terms increased to 69 days in 2018, up from 64 days in 2017. This is in-line with trends observed in Asia since 2015. Corresponding with the increase in payment terms, 63% of those companies surveyed stated that they experienced payment delays in 2018 and the average payment delays also increased to 88 days in 2018, compared to 84 days in 2017. The length of payment delays was highest in China, Malaysia and Singapore; while the length was lowest in Hong Kong and Japan.

 

The survey’s data also highlights changes across different industries. Average payment delays were highest in the energy, construction and ICT sectors, with over 20% of companies from those sectors offering payment terms of 120 days or longer. Longer payment delays in 2018 can be largely attributed to customer financial difficulties. These difficulties are a result of fierce competition impacting margins, as well as a lack of financial resources as a result of tighter Monetary Policies in 2018.

 

Cash flow risks in construction, energy and transport sectors

 

In terms of cash flow risks, Coface’s survey considers the ratio of ultra-long payment delays (exceeding 180 days). According to Coface’s findings, 80% of ultra-long payment delays (ULPDs) are never paid. When these unpaid ULPDs constitute more than 2% of annual turnover, a company’s cash flow may be at risk. The proportion of companies experiencing ULDPs exceeding 2% of annual turnover increased from 26% in 2016 to 33% in 2017, and then to 38% in 2018. Furthermore, the survey’s results found a surge in the number of companies stating that they had ULDPs exceeding 10% of annual turnover. The increase in companies reporting ULPDs exceeding 2% of their annual turnover was highest in China, Australia and Malaysia; as well as the construction, energy and transport sectors in the region.

 

Weaker economic expectations for 2019 spells trouble ahead for payments

 

Economic expectations deteriorated quite significantly in a number of cases last year, according to the survey. Over 50% of companies in Hong Kong, China, Japan, Singapore and Taiwan stated that they do not expect growth to improve in 2019. These economies are directly and indirectly impacted by the trade war between the U.S. and China. Despite weaker sentiment, 53% of companies stated that they do not use credit management tools to mitigate risks. Surprisingly, markets with a majority of risk managers who predict the economy will not improve also feature a large percentage of companies that admitted using no credit management tools.

 

‘2019 will prove to be a more challenging year for companies in Asia Pacific, as weaker growth momentum compounded with an increase in cash flow risks could trigger higher defaults’ said Carlos Casanova, Coface’s Economist for the Asia Pacific Region.

 
Source: Coface
 
« Back to previous page Print this page » |
 

Breaking News »

The Imminent Reality of Cyberattacks for Business

No longer an if, but when a business will experience a cyber attack Participants in Aon's 2019 Global Risk Management Survey ranked cyberattacks and data breaches as #6 in the top 10 risks facing organisations ...
Read More »

  

NEW APPOINTMENT: CGF’s GOVERNANCE SERVICES STRENGTHENED WITH APPOINTMENT OF TRAVERS CAPE (CA(SA), MBA)

CGF is delighted to welcome Travers Cape as a Lead Independent Consultant to our company. Travers has acquired a wealth of experience in senior financial management positions and fulfilled various strategic ...
Read More »

  

Solving the retirement savings challenge

Lessons from around the world   Around the world, workers are being compelled to take more responsibility for their retirement savings as many employers move from traditional Defined Benefit (DB) ...
Read More »

  

AGCS appoints new global leadership positions in Alternative Risk Transfer and Crisis Management lines of business

Christof Bentele, previously Head of Global Crisis Management, assumes a newly created position as Head of Global Client Management at the Alternative Risk Transfer line of business Two successors for reorganized ...
Read More »

 

More News »

Image

Healthcare »

Image

Investment »

Image

Life »

Image

Retirement »

Advertise Here

Have Your Say »

Is insurance a priority for South African millennial's


|Results »
Image
Image
Image
Image
Image
Image
Image
Advertise Here

From The Glossary »

Icon

Long Bond/Long-dated Share:

Any bond with a maturity of over 10 years. However, when bond traders talk about what "the long bond" did in recent trading, they are normally referring to frequently traded long shares.
More Definitions »

 

Advertise

 

eZine

 

Contact IG

 

Media Pack

 

RSS Feeds

By using this website you agree to the Terms of Use.
Copyright © Insurance Gateway (Pty) Ltd 2004 - 2019. All Rights Reserved.