Coface Asia Corporate Payment Survey 2024: Overall improvement but worsening payment behaviour in textile and

 

HONG KONG SAR, Radarseluma.Disway.Id, - The Asia Corporate Payment Survey, conducted by Coface between December 2023 and March 2024, provides insights into the evolution of payment behaviour and credit management practices of about 2,400 companies across the Asia Pacific region. Respondents are active in nine markets (Australia, China, Hong Kong SAR, India, Japan, Malaysia, Singapore, Taiwan and Thailand) and 13 sectors.

 

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Overall, credit conditions are tightening, with payment terms decreasing to 64 days from 66 in 2022. In the meantime, the duration of payment delays decreased from 67 to 65 days

Late payments were more frequent, with 60% of companies experiencing them compared with 57% in 2022, but their average duration fell from 67 to 65 days. Ultra-long payment delays have increased. Textiles and construction are the most affected sectors by these delays.

56% of companies expect the economic outlook to improve in 2024, although slowing demand and intense competition are major risks.

 

'The year 2023 was one of normalisation from the pandemic, but the economic landscape continued to offer its share of challenges in the form of an elevated inflationary and interest rate environment amid persistent geopolitical risks. The surveyed companies expressed the same concerns with about half of respondents citing slowing demand and over-competitive pressures as the two main risks to their company's operations in 2024. Coface forecasts economic growth in Asia Pacific to maintain at over 4% in 2024, with the region still the fastest growing in the world.' said Bernard Aw, Chief Economist for Asia-Pacific at Coface.

 

Payment delays: Significant late payment rise in textile and construction

 

The share of companies surveyed reporting payment delays rose from 57% in 2022 to 60% in 2023, with only China and Japan driving the rise, largely due to their tighter payment terms. Meanwhile, all other markets covered witnessed a reduction in payment delays reported, suggesting improved financial stability after the pandemic. Excessive competition, slowing demand, slowdown in cash flow, and customers' payment defaults are the main cited reasons for payment delays in the region.

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