In his Press meeting of today, thecredit insurer Euler Hermes (Allianz Group, world leader in the sector), mainly addressed three topics: “Ithe global economic slowdown and its global effects; the credit crunch, missed payments and corporate insolvencies trends; the Focus Italia: made in Italy between lights and shadows”. In reality, more shadows than lights seem to characterize the world economy and trade in the two-year period 2012-13.
Mainly affected by the economic recession in Europe, world growth will continue to slow slightly in 2012 up to +2,5% (after 2,9% in 2011), before recovering to 2,8% in 2013. The eurozone will end up in recession in 2012 (-0,5%) due to the weakening of activities in the southern countries (Greece, Spain and Italy) and the weak growth of the remaining nations of the region. Among emerging countries, the BRICs are experiencing a slowdown, with the exception of Russia, which was supported by high oil prices in the first quarter of 2012. China's growth slowed to 7,6% compared to 9,2% in the previous year, Brazil's growth at 1,7% compared to 2,7%, while India grew as in 2011 with a rate of 6,5%.
The global economic slowdown will inevitably have an impact on the global trend in insolvencies (Global Insolvency Index), expected growing by 4% in 2012. The trend should remain downwards in the Americas (-9%) while an increase will be recorded in all other world regions. In Asia, growth will be 4%, in Mediterranean countries 20% (Italy + 12%, growing continuously in the last 5 years) and finally in the Eurozone growth will be 14% (France + 4%, +1% for the area made up of Germany, Austria and Switzerland).
The deceleration of national economic growth is reflected in the trend of non-payments by Italian companies. After the first eight months of 2012, the number of missed payments (frequency) in the internal market grew by 30% compared to the same period of 2011, while theaverage amount (severity) is slightly decelerating: – 2%. The main causes are the difficulty of accessing credit and the drop in internal consumption with the consequent extension of payment times, which lead companies not to honor their commitments. Although with a lower trend, in August, the Export market also saw an increase in substandard payments, recording growth in both frequency (+7%) and severity (+5%).
In addition to the economic trend, Euler Hermes Italia wanted to verify the financial health of four key sectors of Made in Italy: feed, textile, mechanics e iron metallurgy. A general emerges high level of debt and a low level of return on invested capital. Among the four sectors, object of the analysis, food stands out for its virtuosity, with a sustainable level of debt, a growing return on capital and an ever constant trend also in the period 2008-2009. Comment Michael Pignotti (Head of the Mediterranean Countries, Africa and Middle East Region of Euler Hermes, who led the meeting with Ludovic Subran, Chief Economist of Euler Hermes): "To support Italian companies and to recover the productivity gap with other European economies, a relaunch of government, monetary, fiscal and industrial. In particular, it is necessary that all the actions to reduce costs, with priority for energy and access to credit, in order to improve the profitability of companies and encourage their investments in renewal and research".
Attached is the complete press release from Euler Hermes.
Attachments: Euler Hermes-Communiqué Conference-Milan 180912.pdf
