Impact spreading outside of financial services sector globally
AMSTERDAM, Netherlands, June 3 /CNW/ -- Credit-crisis-related factors
such as tight credit and increased payment defaults are expected to result in
slower growth and growing business defaults over the remainder of 2008 and
into 2009. A 14-country survey, covering businesses in North America, Europe
and Australia, sponsored by Atradius and in the United States, cosponsored by
the Credit Research Foundation, found that a much more significant impact is
expected in 2008 than was felt in 2007. Some of the survey's findings include:
-- Approximately 65% of respondents are expecting some bank failures as a
result of the credit crisis.
-- Direct exposure to sub-prime lending is higher in Europe (14% of
respondents) than in the US (9%).
-- About 31% of respondents say they have indirect exposure to sub-prime
lending with exposure highest in Mexico (51%) and the United States
-- Larger companies are more frequently impacted by the credit crisis than
-- Outside of the US and Mexico, companies in Italy (58%), the UK (46%),
Spain (44%), and Australia/New Zealand (43%) have expressed the highest
rates of impact from the credit crisis.
-- Swedish respondents expressed a very low rate of impact (7%) from the
-- 69% of companies in Mexico have already experienced tightening credit
with Italy and Spain also experiencing a high rate of tightening.
Sweden (less than 20%), the Netherlands and Denmark (less than 30%)
have experienced the lowest rates of tightening.
-- By industry, the energy sector has experienced the most tightening and
the agriculture industry the least.
-- Businesses in the energy sector have been impacted by the credit crisis
more than any other industry.
-- The Building Supply & Construction, Industrial & Manufacturing and
Consumer Goods industries are expected to suffer the most over the next
-- Only about 38% of companies surveyed have adjusted their credit
extension policies in response to the changing business climate.
Companies that securitize their receivables have already felt the pinch.
Fewer buyers for, and plummeting valuations on collateralized debt obligations
have resulted in more expensive terms for financing growth through receivables
securitization. Additionally, in countries where the real estate and financial
sectors have been key contributors to economic growth, or where trading with
the US is important, the past and expected future impacts are amplified. The
survey, which looks at a broad range of industries, found that the energy and
basic materials industries have been impacted the hardest thus far.
Peter Ingenlath, Vice Chairman of the Atradius Management Board
commented, "While it seems natural to adjust your credit extension practices
in the face of a deteriorating credit environment, there is no need to tighten
credit policies if your receivables are sufficiently protected, for example by
a credit insurance policy."
The survey highlights industries and countries for which risks associated
with the credit crisis may be more prominent, as well as some of the concerns
about the impact the credit crisis will have on their businesses. An increase
in payment defaults (71% of respondents) was the biggest concern of companies
surveyed followed by restrictions in sales growth (67%) and increased capital
Ingenlath concluded: "In 2008 we expect economic growth to slow globally
and in some markets to decline as a result of slowing consumer spending,
reduced production, inflationary pressures, rapidly rising energy costs and
the weak USD and Sterling. Awareness of the potential risks that can damage
your business is essential to maintaining a healthy company. The credit crisis
is highlighting the importance of protecting the most important organ of
financial fitness, your cash flow. Atradius research can help support decision
makers in many countries and trade sectors."
About the Atradius Credit Crisis Survey
The Atradius Credit Crisis Survey assessed the opinions of 2500 business
professionals in 14 countries regarding their company's experiences and
expectations of the impact of the credit crisis. More information about the
survey results is available at http://www.atradius.com.
The Atradius Group provides trade credit insurance, surety and
collections services worldwide, and has a presence in 40 countries. Its
products and services aim to reduce its customers' exposure to buyers who fail
to pay for the products and services they purchase. With total revenues of
approximately EUR 1.8 billion and 31% share of the global trade credit
insurance market, its products contribute to the growth of companies
throughout the world by protecting them from payment risks associated with
selling products and services on credit. With 160 offices, it has access to
credit information on 52 million companies worldwide and makes more than
22,000 trade credit limit decisions daily.
For information about Atradius products and services available in your
country, visit http://www.atradius.com.
Atradius Corporate Communications
Tel.: +31 20 553 2003
For further information:
For further information: John Blackwell of Atradius Corporate
Communications, +31 20 553 2003, firstname.lastname@example.org Web Site: