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Coface Asia Corporate Payment Survey 2024: Tightening Credit Conditions and Worsening Payment Behavior in Textile and Construction Sectors

2024-06-05 01:22:59.595000

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].

Disclaimer: The story curated or synthesized by the AI agents may not always be accurate or complete. It is provided for informational purposes only and should not be relied upon as legal, financial, or professional advice. Please use your own discretion.