BDI Coface today announced that, despite a further deterioration in its average weighted business risk index in August, the economic crisis has halted and companies are beginning to show signs of recovery. The average weighted business risk index rose 3% to 6.35 points in August from 6.19 points in July (a higher figure denotes greater risk). The index was 5.94 points in August 2008.
BDI adds, however, that the crisis has ended and it predicts an improvement in the economy in the coming months. On the basis of data in its possession and on analysis of previous crises, companies' conditions, especially among retailers and manufacturers of consumer products, deteriorates at the point of emergence from a crisis because these companies are unable to adapt to a crisis, and usually fall. Other companies, especially chemicals and food manufacturers, are beginning to exploit the effect of the end of the crisis and are seeing signs of recovery.
BDI classified 24.8% of companies as high risk in August, up from 21.9% of companies in July. These companies suffer from serious cash flow problems and are liable to close within two years.
Business payment ethic was unchanged in August, from July. The average number of days in payment arrears was unchanged at 12 days. The average number of agreed upon supplier credit days fell by one day to 91 days. 28% of sectors of the economy reported a deterioration in payment ethic, while 62% of sectors reported an improvement.
Published by Globes [online], Israel business news - www.globes-online.com - on September 8, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009