Publications

Payment terms extended by survey respondents in Indonesia are notably more relaxed than last year. Does loosing terms on export sales reflect a need to limit the fall off in export demand?

The global economy is losing steam in 2019 and 2020. Ongoing uncertainty regarding the trade war continues to cloud the outlook.

The adoption of a pension reform that provides savings of at least 600-700 billion reais is key to keep public debt sustainable and to sustain invertors’ confidence in the long-term.

Coupled with high interest rates of more than 60% austerity measures will deepen and lengthen the economic contraction, and a rebound expected in late 2019 at the earliest.

Shock resistance is strong due to prudent economic and financial policies, but a serious disturbance of global trade by protectionism would hurt exports.

GDP is forecast to grow about 3% annually, driven by higher oil prices, investments and consumption, but concerns about the fiscal deficit remain an issue.

Main risks to the outlook are a hard landing of the Chinese economy and social unrest in the mining sector, which could affect the investment climate.

Higher costs of raw materials and import tariffs have increased operational costs and reduced overall profitability in the household appliances segment.

The UK sales outlook for consumer durables in 2019 is more subdued as household finances are strained and private consumption growth is decreasing.

Insolvencies are expected to level off or to increase slightly in 2019, in line with the forecast of a modest 2% increase in Dutch business failures.

Many smaller retailers lack the flexibility and financial means to adapt business models to changing consumer habits, and the credit risk remains elevated.

Retailers´ margins are expected to decrease further due to the fierce competitive market environment in most segments and increased price transparency.

Profit margins of retailers in the online segment to increase slightly in 2019, while brick-and-mortar retailers face continued margin pressure.

The number of payment delays and protracted defaults is expected to remain high in 2019, due to ongoing cash flow problems and restricted access to loans.

Even larger consumer durables retailers could face troubles due to increased financial exposure after acquisitions and the difficult economic environment.

Good payment behaviour in the household appliances, furniture and consumer electronics segments over the past two years, and no major changes are expected.

Both payment delays and insolvencies are expected to increase in the coming six months, mainly affecting smaller consumer durables retailers in Belgium.

With its large population, growing middle class and increasingly modern spending habits Indonesia's retail sector is one of the most promising in Asia.

China´s economic growth is forecast to slow down to 6% while downside risks have increased and business insolvencies will increase further in 2019

India´s economic outlook for 2019 and 2020 remains robust with about 7% growth, but a weak banking sector and high corporate indebtedness are concerns.

Indonesia´s short-term economic prospects are generally positive, but it remains vulnerable to sharply decreasing capital flows to emerging markets.

Japan´s export growth will slow down due to lower global trade expansion, but domestic demand will underpin the economic expansion of about 1% in 2019.

The export sector increasingly benefits from relocation of export-oriented industries away from China, due to Vietnam’s relatively low production costs.

Private consumption and public infrastructure investments sustain Thailand´s economic growth in 2019 and 2020, but high household debt remains an issue.

Economic growth is expected to slow down somewhat in 2019 and 2020, mainly due to lower export growth and the cooling down of the Chinese economic cycle.

Due to its high dependency on international trade, Singapore is highly susceptible to global protectionism and a hard landing of the Chinese economy.

Major infrastructure investment is necessary in order to increase private investments and to safeguard high economic growth rates in the long term.

Due to its high dependency on international trade, South Korea is highly susceptible to global protectionism and a hard landing of the Chinese economy.

Taiwan´s economic expansion is likely to moderate in 2019 and in 2020, as both global trade growth and mainland China´s import demand have cooled down.

As many building materials are imported from the EU tariffs or limits on quantities imported after Brexit could lead to higher costs and material shortage.

The construction materials subsector clearly benefits from increased building material prices, and elevated costs are expected to persist throughout 2019.

The payment duration in the industry has increased to 70 days on average, and the payment experience over the past two years has been rather bad.

Many smaller construction companies have weak equity ratios and limited financial scope, which makes them vulnerable to payment delays and defaults.

Competition in the Swedish construction sector is high and consolidation is ongoing, with financially stronger groups buying financially weaker peers.

The insolvency level is high compared to other industries, and after increasing in 2018 business failures are expected rise further in H1 of 2019.

Payment behaviour in the construction industry slowly deteriorated in 2017 and 2018, and this negative trend is expected to continue in the coming months.

The overall indebtedness of many Belgian construction businesses is still high, while banks remain rather unwilling to provide credit to the industry.

Besides the low spending capacity, ongoing tight lending conditions set by banks remain one of the main reasons for the subdued sector performance.

Payments in the Australian construction sector take 30-60 days on average, and the level of protracted payments and insolvencies was high in 2018.

Late payments by mainly larger companies continue to negatively affect the working capital management of many smaller businesses in all segments.

Mid-sized businesses are facing profitability issues due to higher labour costs triggered by shortage of qualified staff and increased commodity prices.

Despite increasing clouds on the horizon, there remain several bright spots for export opportunities in emerging markets.

The economic impact of USMCA on Mexican-US trade is likely to be limited, as it is effectively a small modification of the pre-existing NAFTA agreement.

Trade policy uncertainty is one of the top risks to US businesses and consumers in 2019 that may bring the next downturn on more quickly than expected.

Despite a forecast growth slowdown in 2019 the economy should still experience positive momentum, with low unemployment and manageable inflation.

Some larger players continue to push the supply chain on price and longer payment terms, adding cash flow challenges to mainly smaller food businesses.

Many food producers and processors struggle to pass on higher input prices, which is hampered by the high concentration and market power of retailers.

As the UK is a major Danish export market, a hard Brexit could trigger a significant decrease in Danish export of food and agricultural products.

Despite efforts of food exporters to diversify shipments away from Britain, a hard Brexit remains a major challenge, also for shipments to mainland Europe.

Growth is set to continue, but the strong export orientation makes many food businesses susceptible to trade disputes and price/currency fluctuations.