Coface Asia Corporate Payment Survey 2024: Overall improvement but worsening payment behaviour in textile and construction
Source: EQS
'The year 2023 was one of normalisation from the pandemic, but the economic landscape continued to offer its share of challenges in the form of an elevated inflationary and interest rate environment amid persistent geopolitical risks. The surveyed companies expressed the same concerns with about half of respondents citing slowing demand and over-competitive pressures as the two main risks to their company's operations in 2024. Coface forecasts economic growth in Payment delays: Significant late payment rise in textile and construction The share of companies surveyed reporting payment delays rose from 57% in 2022 to 60% in 2023, with only
Textile and Construction saw a significant increase in late payments reported. Textile faced higher production costs and rampant demand, and Construction suffered sluggish While the average payment delay duration dropped from 67 days in 2022 to 65 days in 2023, most markets covered saw a rise. The duration of payment delays increased the most in the textile and agri-food sectors, both by 11 days. Energy and pharmaceuticals saw the biggest falls, of 11 and 10 days respectively. The construction sector still has the longest payment delay (76 days), and the pharmaceutical has become the one with the shortest (57 days). The proportion of respondents experiencing ultra-long payment delays (ULPD) over 2% of their annual sales has risen from 26% in 2022 to 29% in 2023. This 2% threshold represents a very high risk of non-payment, given that 80% of these delays have never been paid, according to Coface's experience. Companies are generally optimistic about future payment behaviours, with 30% expecting improvement in late payment trends while the 18% expecting deterioration are mainly textile and retail companies. Economic Expectations: Growing optimism despite demand risks Looking forward, we forecast economic growth in APAC to maintain at over 4% in 2024. This is consistent with our respondents' anticipations, as 56% expect their business activity to improve in 2024 with Companies still reported several risks that could hurt their operations in 2024. Nearly half of respondents cited slowing demand and over-competitive pressures, and nearly a third highlighted higher prices for inputs and raw materials and higher labour costs as a key operational risk. Hashtag: #Coface The issuer is solely responsible for the content of this announcement. COFACE: FOR TRADEWith over 75 years of experience and the most extensive international network, Coface is a leader in trade credit insurance & risk management, and a recognized provider of Factoring, Debt Collection, Single Risk insurance, Bonding, and Information Services. Coface's experts work to the beat of the global economy, helping ~50,000 clients in 100 countries build successful, growing, and dynamic businesses. With Coface's insight and advice, these companies can make informed decisions. The Group' solutions strengthen their ability to sell by providing them with reliable information on their commercial partners and protecting them against non-payment risks, both domestically and for export. In 2022, Coface employed ~4,720 people and registered a turnover of News Source: Coface
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