Despite a rise in payment delays, businesses in Western Europe are optimistic

In our most recent survey, businesses told us they expect growth over the coming months

The results of the 2022-2023 Atradius Payments Practices Barometer Survey for Western Europe have now been published. They reveal interesting insights into the experiences of businesses across the region. Most notable among the results of this year’s survey is the strong sense of optimism in the face of pretty challenging conditions.

63% of businesses told us they expect to see a strong improvement in demand during the next few months. A similar percentage told us they anticipate a growth in their profit margins over the coming year. This is despite several factors that, on the surface, look like they would cause business stress.

What are the challenges facing businesses in Western Europe?

On many levels the world is still adjusting to the massive upheaval that the pandemic caused to both health and the economy. In Western Europe, this is evident in stubbornly high rates of inflation, as well as the high cost of borrowing resulting from monetary tightening by most of the region’s central banks. Geopolitical tensions have also all played their part in some difficult trading conditions.

What are the key findings of the Payment Practices Survey?

The headlines are that almost half of all B2B sales were reported overdue this year. The average length of time businesses had to wait to collect payment was 73 days. 6% of all sales across the entire region were written off. These all represent a significant deterioration in year-on-year payments behaviour.

However, deteriorating payments behaviour is only one part of the wider picture. Businesses throughout the region also expressed a widespread sense of optimism, with a significant number expecting to see growth in the coming months.

Some businesses attributed delayed payments to a form of low-cost short-term credit, a useful tool when interest rates are high. Others told us they had expected a dip in payments behaviour as governments rolled back the Covid temporary support measures. Some businesses acknowledged putting investment plans on hold. The key point in each of these areas is that businesses told us these were temporary actions. The majority expect trade to pick up and for their businesses to experience growth again.

The future is bright as business growth picks up

Maybe one of the biggest takeaways from the survey is that so many businesses anticipated a tricky period and were prepared for it. 54% of the businesses polled said they used credit insurance during the past 12 months. This is a 15% rise on last year and bodes well for a brighter future and safer trading environment for all businesses that come under its protective umbrella.

Of course, knowledge is power. The businesses that anticipated a tricky trading environment as governments withdrew fiscal support have, for the most part, weathered the past few months really well. This is why we, at Atradius, put such an emphasis on staying close to your customers and understanding the reasons behind any delay in payment. Our underwriters are also continuously monitoring the payment behaviour of businesses around the world and are in the know when businesses are struggling and in financial stress. We alert our customers when we see signs of deterioration and keep a close eye on developments. Keeping an open dialogue and sharing information is key to enable businesses to make informed decisions and continue to trade safety despite the current economic environment,

The Atradius Payments Practices Barometer Survey is one of many sources of intelligence we collect. It takes views from businesses across sectors and sizes, including those with and without credit insurance cover and helps us get a good ‘temperature check’ of general business health in a region.

 For Western Europe, as recorded in this latest survey, we’re fairly confident that business health is picking up and the future is bright. You can read the key findings of the Western Europe results below.

Download the Atradius Payment Practices Barometer:Western Europe report here