Credit Management December 2022

PAYMENT TRENDS
Regional Recovery?
The latest late payment figures show
signs of local improvement
AUTHOR – Rob Howard
LAST month saw late payments rising across the board,
perhaps unsurprising given the current climate. And while
the latest figures are not all sunshine and rainbows, there
are some signs of encouragement, particularly at a local
level, with regions across the UK and Ireland making
some progress.
The average Days Beyond Terms (DBT) across regions in the UK
decreased by 1.0 day, while the sector figure saw no change. In Ireland,
the regional figure decreased by 6.6 days and rose by 4.3 days across
sectors. Average DBT across the four provinces of Ireland reduced by
3.6 days.
Sector spotlight
The UK sector figures show 10 sectors improving and 12 sectors moving
further in the wrong direction. Of those on the slide, the International
Bodies sector saw the biggest increase to late payments, with a hefty
hike of 17.5 days taking its overall DBT to 37.2 days, meaning it is now
the worst performing sector.
Elsewhere, the Energy Supply (+7.2 days), Mining and Quarrying
(+6.0) and Financial and Insurance sectors (+4.1 days) are all getting
worse. Of those on the up, the Business from Home sector saw the
biggest improvement and becomes the best performing sector with an
overall DBT of 8.8 following a reduction of 10.8 days.
Things are split over in Ireland, with seven sectors getting better,
seven sectors getting worse, and the remaining six sectors staying as
they were. Looking at the positives, the Hospitality sector made the
biggest strides in the right direction, reducing DBT by 67.0 days, while
the Business Admin & Support (-28.2 days) and Construction (-10.4 days)
sectors also made important reductions.
At the other end of the scale, of those getting worse, the Real Estate
sector saw the biggest hit, with a hefty increase of 83.5 days taking its
overall DBT to 120.0 days. The Wholesale and retail trade; repair of motor
vehicles and motorcycles (+51.3 days), Health & Social (+31.3 days) and
Transportation and Storage (+23.6) sectors also saw large increases to
late payments.
Regional spotlight
The UK regional figures make for more positive reading, with eight of
the 11 regions making reductions to late payments. East Anglia saw
the biggest improvement, reducing its DBT by 4.9 days, with London
(-4.6 days) and the South West (-3.6 days) not too far behind. Despite
no change, Yorkshire and Humberside remains the best performing UK
region with an overall DBT of 13.3 days. Increases for Northern Ireland
(+6.3 days) and Scotland (+1.6 days) mean they move to the bottom of
the standings.
In Ireland, less than a third (11) of the 26 regions are moving in the right
direction, but the average DBT figure across the country has dropped by
6.6 days due mainly to the scale of reductions. The county of Longford
saw the biggest improvement, reducing its DBT by an impressive 50.0
days. Meath (-46.9), Kildare (-38.0 days) and Louth also made sizeable
cuts to late payments. Equally deserving of a mention are Sligo (-23.0
days), Tipperary (-14.8 days), Leitrim (-11.0 days) and Laois (-5.0 days),
whose reductions mean they all now have an overall DBT of zero days.
Across the four Irish provinces, Ulster (+20.7) and Connacht (+2.7
days) saw increases, while Leinster (-31.5 days) and Munster (-5.7 days)
made important reductions. Munster improvement means it is now the
best performing province with an overall DBT of 5.7 days.
Brave | Curious | Resilient / www.cicm.com / December 2022 / PAGE 50