The war in Ukraine, which began in late February, once again plunged many industries into a dense fog. After two long years of a pandemic, economic indicators are deteriorating at a rapid pace. In just four weeks, most economists have lowered their macroeconomic forecasts for 2022. Soaring energy prices and lingering turmoil in supply chains are seriously undermining activity.
“You can say to yourself that the French economy was able to weather this crisis, having survived the pandemic and the financial crisis of 2008, but I believe this less and less. this war is likely to destroy the economy. There are no real surprises in supply chains. Added to this is the explosion in energy prices and difficulties in the food and agri-food industries, in the textile industry. Businesses are suffering. Some sectors will not support price increases, such as carriers.”, Explain Gallery, Thierry Millon, director of research at Altares.
Even if the latest talks between Russia and Ukraine have sparked a glimmer of hope in certain economic and financial circles, this business data scientist fears a rise in bankruptcies. “In the summer of 2022, we can expect a peak in payment terms. The next step for some companies is default. All sectors are almost in the red, he warned.
The level is still higher than in 2019
In this particularly worrisome context, the 2021 report released by Altares on Tuesday evening, March 29, indicates that last year’s payment terms (12.5 days late) have still not recovered to pre-crisis levels (lag by 11.5 days). . “Every day of delay is worth billions of euros in intercompany exchanges.” recalls Thierry Millon. While the situation has tended to improve for several years, the spread of the virus in all sectors of the French economy has suddenly caused the number of days recorded since the spring of 2020 to jump to the peak of the first detention, going from 11.3 days to 14 ,4. days.
After a peak in the second quarter of 2020, the situation tends to improve. At the end of 2021, France’s average late payments are about one day short of the European average, while two years ago, payment maturities reached a comparable length. In this regard, the French economy is growing faster than the average for the countries of the Old Continent.
In the midst of the pandemic, Bercy set up a dedicated crisis unit dedicated to this burning topic to avoid cascading effects in the sectors hardest hit by the pandemic. Under the guidance of a business intermediary and a credit intermediary, this team pounded their fists on the table to remind them of the rules of good behavior regarding payment deadlines, namely respecting 60 days from the date of the invoice. in the private sector. However, many industries can benefit from the derogations, explains the website of the General Directorate of Competition, Consumer Affairs and Fraud Prevention (DGCCRF).
All sectors are improving, except recovery is still in the red
The strong economic recovery in 2021 has revitalized entire sectors of the French economy, hard hit by waves of infection and restrictive measures. “All sectors managed to return to the level of early 2020. The construction and industrial sectors returned to outstanding levels. In construction, the lead times for orders reached an average of 10 days. “, says the specialist.
On the other hand, restoration remains the black point of this study. Delays in this sector even tend to increase by two days between 2020 and 2021 at 20.3 days, well above the national average. It must be said that accommodation and food have been hit hard by all the containment measures since the spring of 2020. “Accommodation and food faced great difficulties. Meals are traditionally around 13 days. In the summer of 2020, the deadlines were close to 25 days. some structures, we are still very far from their pre-crisis level,” emphasizes M. Millon.
After almost 20 days of delay, the consumer services sector recorded a rather sharp decline over the study period (-4 days). “Curfew times have had a strong impact on some establishments such as barbershops.”. Regarding the improvement of business services, “It’s not enough,” says Thierry Millon. This is a sector that traditionally lags behind. There is no reason to be late in this sector,” he continues.
Big companies, bad students
In the summer of 2020, most companies, regardless of their size, faced longer payment deadlines. In the fall of 2020, the indicators returned to green with deviations. For companies with fewer than 200 employees, late payments improve and stabilize for businesses with 200 to 999 employees.
On the other hand, large companies with more than 1,000 employees are poor learners with little increase between 2020 and 2021. “Under these conditions, payment terms are increasingly different depending on the size of companies. Thus, we see a gap of 5 days in 2021 between structures with less than 50 employees and structures with more than 1,000 employees (compared to 4.4 days in 2020).”, the authors of the study note. “This is a delicate topic. It is necessary to point out bad students through “name and shame” and at the same time single out good students”, emphasizes Thierry Millon. “Summarizing electronic invoicing could be a solution to reduce payment times,” want to trust an expert. Meanwhile, uncertainty about the outcome of the conflict in Ukraine continues to weigh on the morale of businesses and households.