2016 Global Payments Performance Trends

Together with its World Wide Wide Network Partners, Dun & Bradstreet keeps a close eye on global payments performance trends. The CRIBIS D&B 2016 Payment Study (download full report here) was created by CRIBIS D&B with the support and collaboration of 34 WWN countries across the globe. It highlights significant differences in payments performance across regions and also between sectors.

Generally speaking, payments performance of companies in the US is better than in Canada, China, and most countries in Europe. However, the differences in Europe are immense and should be monitored frequently, especially as a resurgence of the eurozone crisis is in the cards over the next weeks. Payments performance in Mexico is slightly better than the US but is deteriorating.

In the US, the proprietary data shows that the share of prompt payments (as a percentage of all payments) has increased from 43.5% in 2007 to 53.8% in 2015 (but is down from 54.2% in 2014). In the same period, the share of payments made 90 or more days late dropped from 4.9% to 3.5%, thereby positively impacting the risk of late payment or even nonpayment. In a sectoral comparison, the financial sector and agriculture settled a high amount of their bills by due date (62.3% and 61.8%, respectively). At the other end of the spectrum, 5.4% of all bills in the construction sector were not paid 90 or more days after due date.

In Canada, things have moved in the wrong direction: Since 2007 the share of prompt payments has dropped from 38.5% to only 35.3%. However, the number of bills not settled 90 or more days after due date dropped to 1.2% in the same period (down from 3.3% in 2007), thereby somewhat counterbalancing the drop in prompt payments. Similar to the US, agricultural companies are, on average, quick payers (54% of all bills are paid on time), followed by the service sector (41.2%).

South of the Rio Grande, payments performance has also deteriorated, with the share of prompt payments dropping from a high 70% in 2010 to only 55.6% in 2015. Encouragingly, despite the deterioration, only 0.6% of all bills remain unsettled after 90 or more days. Unlike in the US, Mexican construction companies’ payments performance is outstanding, while manufacturers have settled more than 97% of their bills within 30 days after due date.

Across the Pacific, China has seen an increase (albeit a small one) in the share of prompt payments (from 33.1% in 2011 to 33.2% in 2015) and a simultaneous drop in the number of bills still not paid 90+ days after due date (7.9% in 2011 to only 6.1% now). Manufacturing is ranked in the middle (5.2% of all payments are 90+ days late), with construction being risky in particular. Looking ahead, the gradual macroeconomic slowdown in China has the potential to adversely impact payments performance.

Meanwhile, in Europe the situation is less clear as significant country-level differences persist. Overall, the share of prompt payments dropped slightly in the last year (from 37.6% in 2014 to 37.5% in 2015). Unsurprisingly, the troubled nations in the south of the continent lag the economically stable ones in the north by a big margin. While in economically challenged Greece only 22.7% of all bills were paid on time in 2015 (Portugal is at the bottom of the table with only 20.1%). German and Danish companies again top the table with 72.3% and 87% prompt payments, respectively.

In terms of late payments (defined as 90+ days after due date), the European average has dropped to 3.5% in 2015 (from 3.8% in 2014), but similar differences are also clearly visible. Greek companies are the worst payers (19.9% of all bills have not been settled), followed by Poland (14.8%) and Portugal (11.7%). The smallest share of late payments can be found in Denmark (with virtually no bills unsettled after 90 days), Germany (0.5%), Hungary (0.6%), and the Czech Republic (0.7%).

Read the full report here.

 

CRIBIS      Dun & Bradstreet

 

Having previously worked for the European Parliament in Brussels, Markus Kuger joined D&B’s office in Marlow/United Kingdom in June 2010. In his role as Senior Economist in D&B Macro Market/Country Insight Products, he is writing about his home country Germany as well as the UK, France, the Netherlands, and Poland.

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