Businesses in the UK have reported decreasing bad debt losses in a sign of a strengthening economic environment. On average, businesses wrote off 2.0 percent of annual revenue due to non-payment in the past 12 months; a decrease from the 4.7 percent reported by UK companies in 2017.
The findings, which are part of the European Payment Report 2018, released by the pan-European credit management firm Intrum, also show that fewer businesses report negative consequences of late payments.
Clients still pay late, but businesses seem to have become slightly more positive about their ability to handle that. That said, 42 percent of respondents say late or non-payments hinder growth, while 32 percent are unable to hire new staff as a result. In the UK 24% of polled companies cite late payment as a threat to their survival – much higher than the European average of 10%.
“More needs to be done to ensure prompt payment as it has a significant impact on the vulnerability of small and medium-sized enterprises,” said Intrum’s UK Managing Director Eddie Nott. “There is still a long way to go to ensure the growth of UK businesses is not held back by poor payment.”
The report is based on 9,607 surveyed businesses around Europe, including 452 in the UK. More than half (54 percent) of businesses in the UK say that that have been asked to accept longer payment terms than they are able to manage in their daily operations and 48 percent admit to having accepted these demands.
The European Late Payment Directive has had a positive impact on payments, according to 37% of the UK businesses polled. While this is promising, too many businesses still struggle to be paid on time.
“Legislation is important, but clearly a change in attitude and behavior is needed so that there is a willingness to do the right thing and stop taking advantage of sub suppliers who are dependent on their larger clients,” says Eddie Nott.
He adds: “Payment within 30 days. That is what the directive and local regulations stipulate. Fair payment terms are a significant ingredient in a sound economy.”
Meanwhile, British businesses were more likely than their European counterparts to say that GDPR will have an impact on payment routines. In the UK 30% of all companies surveyed expect an impact, compared with 14% across Europe. However, 21% of UK businesses also expect GDPR legislation to have a positive impact on their business.
The UK is also leading the way in cryptocurrencies in Europe, with 15% saying they already accept cryptocurrencies such as Bitcoin or Ethereum as payment from their customers, compared with the European average of 2%. Of those in the UK who do not yet take these payments, 16% expect to do so within two years – much higher than the European average of 3%.
About Intrum’s European Payment Report 2018
The European Payment Report 2018 is based on a survey that was conducted simultaneously in 29 European countries between January 24 and March 23, 2018. In this report, Intrum gathers data from a total of 9,607 companies in Europe, including 452 in the UK, to gain insights into the payment behavior and financial health of European businesses. The survey was conducted among persons that have identified themselves as either CFO, head of credit, business controller or similar.
In the UK Intrum has achieved top Investor in Customers (IIC) ratings for four consecutive years and has won a string of awards for its ethical approach. It is a registered firm of the Lending Standards Board and the first business of its kind to achieve an ISO standard for dealing with vulnerability.
Intrum is the industry-leading provider of Credit Management Services with a presence in 24 markets in Europe. Intrum helps companies prosper by offering solutions designed to improve cash flows and long-term profitability and by caring for their customers. To ensure that individuals and companies get the support they need to become free from debt is one important part of the company’s mission. Intrum has more than 8,000 dedicated and empathetic professionals who serve around 80,000 companies across Europe. In 2017, the company generated pro forma revenues of SEK 12.2 billion. Intrum is headquartered in Stockholm, Sweden and the Intrum share is listed on the Nasdaq Stockholm exchange. For further information, please visit http://www.intrum.com.
Tänak wins easily in the Arctic as Rovanperä grabs early title lead
Finn becomes youngest ever WRC leader with Belgian Neuville back in third.
Ott Tänak sealed a dominant start-to-finish victory at Arctic Rally Finland Powered by CapitalBox on Sunday afternoon.
The Estonian was never seriously challenged during the three-day encounter in Lapland’s frozen forests. He built a comfortable lead during the first two legs and eased through the finale to win the FIA World Rally Championship’s second round by 17.5sec.
Home hero Kalle Rovanperä fended off a charging Thierry Neuville to claim the best result of his career in second. At just 20 years old, he became the youngest driver to lead the WRC in the championship’s 49-year history. Neuville finished 2.3sec adrift in third.
Tänak won five of the 10 snow and ice speed tests in his Hyundai i20. Apart from a brush with a snowbank on Saturday, he avoided trouble on superfast roads near Rovaniemi to kick-start his title bid after retiring from the season-opener in Monte-Carlo.
“The pressure was there and we knew it was going to be very complicated to take the fight,” he said. “In the end we did a very good weekend, with only one mistake. It’s an amazing place, definitely one of the best places to have a winter rally.”
Rovanperä, starting just his ninth top-level rally, began the final day with a 1.8sec buffer to Neuville. He extended it by a tenth in the first of two passes through the 22.47km Aittajärvi test, before winning the final Wolf Power Stage to retain his grip on second.
The Toyota Yaris driver moved four points clear of Neuville at the top of the standings, relegating world champion Sébastien Ogier who had a disappointing weekend. The Frenchman finished 20th after burying his Yaris into a snow drift.
Neuville’s third place provided a double podium for Hyundai Motorsport, which reduced Toyota Gazoo Racing’s manufacturers’ championship lead to 11 points.
Craig Breen finished fourth in another i20 after a four-rally absence. Tyre management was crucial and the Irishman fell back on Saturday as he struggled for grip on deteriorating roads after ending the opening day in second. He was 52.6sec adrift of Tänak.
Breen kept Elfyn Evans at bay in the final test after the Welshman closed to within 3.6sec in the penultimate stage. The final gap between them was 8.9sec. Japan’s Takamoto Katsuta rounded off the top six in another Yaris.
Tributes were made on the podium to Finnish rally great Hannu Mikkola. The 1983 world champion and three-time runner-up died on Friday and the Finnish Air Force led the accolades with an F18 Hornet flypast.
The WRC moves to the asphalt Croatia Rally for round three, which is based in Zagreb on April 22-25.
1. O Tänak / M Järveoja EST Hyundai i20 2hr 03min 49.6sec
2. K Rovanperä / J Halttunen FIN Toyota Yaris +17.5sec
3. T Neuville / M Wydaeghe BEL Hyundai i20 +19.8sec
4. C Breen / P Nagle IRL Hyundai i20 +52.6sec
5. E Evans / S Martin GBR Toyota Yaris +1min 01.5sec
6. T Katsuta / D Barritt JAP Toyota Yaris +1min 37.8sec
FIA World Rally Championship (after round 2 of 12)
1. K Rovanperä 39pts
2. T Neuville 35
3. S Ogier 31
4. E Evans 31
5. O Tänak 27
Euro zone factories buzzing in February as demand soars
By Jonathan Cable
LONDON (Reuters) – Euro zone factory activity raced along in February thanks to soaring demand, a survey showed on Monday, although the burst of business led to a shortage of raw materials and a spike in input costs.
Restrictions imposed across the continent to try to quell the spread of the coronavirus have shuttered vast swathes of the bloc’s dominant services industry, meaning it has fallen to manufacturers to support the economy.
IHS Markit’s final Manufacturing Purchasing Managers’ Index (PMI) jumped to a three-year high of 57.9 in February from January’s 54.8, ahead of the initial 57.7 “flash” estimate and one of the highest readings in the survey’s 20-year history.
An index measuring output, which feeds into a composite PMI due on Wednesday that is seen as a good guide to economic health, climbed to 57.6 from 54.6, well above the 50 mark separating growth from contraction.
“Manufacturing is appearing as an increasingly bright spot in the euro zone’s economy so far this year,” said Chris Williamson, chief business economist at IHS Markit.
“The solid manufacturing expansion is clearly helping to offset ongoing virus-related weakness in many consumer-facing sectors, alleviating the impact of recent lockdown measures in many countries and helping to limit the overall pace of economic contraction.”
A Reuters poll last month showed the bloc was in a double dip recession and that the economy would contract 0.8% this quarter after shrinking 6.9% in 2020 on an annual basis. [ECILT/EU]
Rocketing demand for manufactured goods pushed factories to increase staffing levels for the first time in nearly two years.
But lockdown measures disrupted supply chains and factories struggled to obtain raw materials, leading to a big increase in delivery times.
“The growth spurt has brought its own problems, however, with demand for inputs not yet being met by supply. Shipping delays and shortages of materials are being widely reported, and led to near-record supply chain delays,” Williamson said.
Those shortages allowed suppliers to hike their prices at the fastest rate in almost a decade. The input prices PMI bounced to 73.9 from 68.3.
(Reporting by Jonathan Cable; Editing by Hugh Lawson)
Strong exports lift German factory activity to three-year high in February – PMI
BERLIN (Reuters) – Higher demand from China, the United States and Europe drove growth in German factory activity to its highest level in more than three years in February, brightening the outlook for Europe’s largest economy, a survey showed on Monday.
IHS Markit’s Final Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about a fifth of the economy, jumped to 60.7 from 57.1 in January.
It was the highest reading since January 2018 and came in slightly better than the initial “flash” figure of 60.6.
Factories have been humming along during the pandemic on higher foreign demand, helping the German economy avoid a contraction in the last quarter of 2020 and offsetting a drop in consumer spending amid a partial lockdown to contain COVID-19.
Many manufacturers reported higher demand from Asia, especially China, as well as the United States and European countries, with export sales posting their biggest increase since December 2017, the survey showed.
Phil Smith, Principal Economist at IHS Markit, said supply chain pressures intensified as more firms reported delays than ever before in nearly 25 years of data collection.
“There looks to be further upward pressure on inflation in the German economy from supply bottlenecks and a subsequent surge in manufacturing input costs,” Smith noted.
The survey suggested that supply disruption is making it more difficult to replenish stocks, which could complicate production in the coming months, he cautioned.
“Nevertheless, the overriding sentiment for the longer-term outlook is optimism, with a record number of manufacturers expecting to see output rise over the next 12 months.”
Still, economists expect the economy to shrink in the first quarter of this year due to a stricter lockdown, which has shut most shops and services since mid-December, and freezing temperatures that slowed construction activity in February.
(Reporting by Michael Nienaber; Editing by Hugh Lawson)
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