The Asia Corporate Payment Survey conducted by Coface between December 2023 and March 2024 reveals that credit conditions are tightening in the region [1f36dd54]. Payment terms have decreased to 64 days from 66 days in 2022. Late payments have become more frequent, with 60% of companies experiencing them compared to 57% in 2022. However, the average duration of late payments has decreased from 67 days to 65 days [1f36dd54].
The textile and construction sectors are the most affected by payment delays. Companies in these industries have reported a significant increase in late payments [1f36dd54].
Despite these challenges, 56% of companies expect the economic outlook to improve in 2024. Coface forecasts economic growth in the Asia Pacific region to remain at over 4% in 2024 [1f36dd54].
The survey also highlights that the share of companies reporting payment delays has increased from 57% in 2022 to 60% in 2023. China and Japan are the main drivers of this rise, while other markets covered in the survey have witnessed a reduction in payment delays reported [1f36dd54].
In addition, the duration of payment delays has increased the most in the textile and agri-food sectors. 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 [1f36dd54].
Despite these challenges, companies remain optimistic about future payment behaviors, with 30% expecting an improvement in late payment trends. Almost half of the respondents have signaled improved business activity compared to 2022, and 56% expect their business activity to improve in 2024. However, over-competitive pressures and higher prices for inputs and raw materials are cited as key operational risks for companies in 2024 [1f36dd54].