Global insolvency rates forecast to rise in 2019
A recent economic research report from the credit insurer Atradius forecasts that global insolvencies are set to grow in 2019 for the first time in 10 years.
The report further suggests that the greatest rise of 7% will be experienced in the UK, representing the highest increase of all advanced markets. The uncertainty caused by Brexit continues to affect business confidence and the recent extension of the deadline to secure a deal with the EU may serve to extend the economic lack of confidence still further. UK business investment has contracted over the past four quarters as organisations are reluctant to make long-term funding decisions until the economic landscape becomes more settled.
This has had a significant impact on supply chains with the construction sector being particularly badly affected. This industry is very much inter-connected in terms of suppliers, contractors and sub-contractors and so the impact of restricted cash flow which may cause late payments, and even insolvency, could be significant and its repercussions felt throughout the supply chain.