Oshkosh Corporation provides a presentation at the Global Hunter Securities 4th Annual Industrials Conference on September 2, 2015. The presentation summarizes Oshkosh's business segments, recent performance, expectations for fiscal year 2015, and outlook. Key points include: Oshkosh has four business segments including access equipment, defense, fire & emergency, and commercial; defense earnings are expected to bottom out in fiscal year 2015 before returning to growth; access equipment demand has softened but longer-term drivers remain intact; and the company targets continued margin expansion and solid earnings growth in fiscal years 2016 and 2017 as end markets recover.
Flash comment: Estonia - September 7, 2012Swedbank
- According to revised data, Estonia's economic growth slowed to 2.2% in the second quarter from 3.4% in the first, though seasonally adjusted quarterly growth accelerated.
- Domestic demand (6.1% growth) rather than exports drove growth, with high investment (25.8%) but surprisingly weak private consumption (1.9%).
- Construction, retail, and ICT saw the highest sectoral contributions while manufacturing's contribution was negative for the second quarter in a row.
- Revised GDP figures showed a deeper economic crisis and steeper recovery than previously estimated, though first half 2012 growth remained largely the same.
Economic Prospects Challenges And Opportunities Lloyds Tsb Trevor WilliamsRoberto Grossi
The document summarizes the key economic challenges and opportunities facing the global economy in 2008. It identifies the credit crisis and rising inflation as the two main themes. The credit crisis stems from the bursting of the asset price bubble in the early 2000s, while rising inflation is due to strong global growth pushing up commodity demand. The implications are likely slower growth in developed economies, rising corporate insolvencies, and tighter monetary policy. Emerging markets will continue outperforming but face risks from high inflation.
Mercer Capital's Value Focus: Construction and Building Materials | Q2 2020 |...Mercer Capital
Mercer Capital's Construction Industry newsletter provides a broad range of specialized valuation and transaction advisory services to the construction industry, including residential, commercial, civil, paving, concrete, and more. Each issue includes a segment focus, market overview, mergers and acquisitions review, and more.
The document discusses the impact of COVID-19 on global financial markets and key risk transmission channels. It finds that equity markets plunged and volatility spiked due to growth concerns, though unprecedented policy support has helped stabilize markets. Corporate bond spreads widened and oil prices declined sharply. Policy responses have contributed to easier financial conditions, though transmission is uneven. Deteriorating corporate credit quality and high leverage, especially among riskier firms, increase downside risks as earnings decline. Stress testing shows more firms could face debt distress under a downside scenario. Rising risks are also seen in leveraged loans and CLO markets.
The document discusses recent developments in global financial markets. It finds that while supportive monetary and fiscal policies are strengthening recovery prospects, growing vulnerabilities could impact growth. Accommodative policies have led to rising asset prices, debt, and leverage, increasing financial stability risks. Vulnerabilities in corporate debt markets and real estate sectors exposed to weak firms pose challenges. Rising emerging market debt also increases refinancing risks. The growth of alternative finance like crypto assets raises concerns of market corrections that could have broader implications.
This presentation provides an updated overview of the state of global financial markets with a focus on the developments following the COVID-19 crisis and an assessment of market dynamics and downside risks
The document provides an economic update from the Young Fabians in August 2019. It summarizes recent UK economic developments, including GDP contracting in Q2 2019 for the first time since 2012, a weakening housing market, and slowing global growth due to trade wars. It then looks forward, noting potential GDP recovery in Q3 but continued trade tensions. Charts show declining business and consumer confidence, falling stock markets, and downgraded GDP and higher unemployment forecasts by the IMF and YFEF compared to other institutions.
Oshkosh Corporation provides a presentation at the Global Hunter Securities 4th Annual Industrials Conference on September 2, 2015. The presentation summarizes Oshkosh's business segments, recent performance, expectations for fiscal year 2015, and outlook. Key points include: Oshkosh has four business segments including access equipment, defense, fire & emergency, and commercial; defense earnings are expected to bottom out in fiscal year 2015 before returning to growth; access equipment demand has softened but longer-term drivers remain intact; and the company targets continued margin expansion and solid earnings growth in fiscal years 2016 and 2017 as end markets recover.
Flash comment: Estonia - September 7, 2012Swedbank
- According to revised data, Estonia's economic growth slowed to 2.2% in the second quarter from 3.4% in the first, though seasonally adjusted quarterly growth accelerated.
- Domestic demand (6.1% growth) rather than exports drove growth, with high investment (25.8%) but surprisingly weak private consumption (1.9%).
- Construction, retail, and ICT saw the highest sectoral contributions while manufacturing's contribution was negative for the second quarter in a row.
- Revised GDP figures showed a deeper economic crisis and steeper recovery than previously estimated, though first half 2012 growth remained largely the same.
Economic Prospects Challenges And Opportunities Lloyds Tsb Trevor WilliamsRoberto Grossi
The document summarizes the key economic challenges and opportunities facing the global economy in 2008. It identifies the credit crisis and rising inflation as the two main themes. The credit crisis stems from the bursting of the asset price bubble in the early 2000s, while rising inflation is due to strong global growth pushing up commodity demand. The implications are likely slower growth in developed economies, rising corporate insolvencies, and tighter monetary policy. Emerging markets will continue outperforming but face risks from high inflation.
Mercer Capital's Value Focus: Construction and Building Materials | Q2 2020 |...Mercer Capital
Mercer Capital's Construction Industry newsletter provides a broad range of specialized valuation and transaction advisory services to the construction industry, including residential, commercial, civil, paving, concrete, and more. Each issue includes a segment focus, market overview, mergers and acquisitions review, and more.
The document discusses the impact of COVID-19 on global financial markets and key risk transmission channels. It finds that equity markets plunged and volatility spiked due to growth concerns, though unprecedented policy support has helped stabilize markets. Corporate bond spreads widened and oil prices declined sharply. Policy responses have contributed to easier financial conditions, though transmission is uneven. Deteriorating corporate credit quality and high leverage, especially among riskier firms, increase downside risks as earnings decline. Stress testing shows more firms could face debt distress under a downside scenario. Rising risks are also seen in leveraged loans and CLO markets.
The document discusses recent developments in global financial markets. It finds that while supportive monetary and fiscal policies are strengthening recovery prospects, growing vulnerabilities could impact growth. Accommodative policies have led to rising asset prices, debt, and leverage, increasing financial stability risks. Vulnerabilities in corporate debt markets and real estate sectors exposed to weak firms pose challenges. Rising emerging market debt also increases refinancing risks. The growth of alternative finance like crypto assets raises concerns of market corrections that could have broader implications.
This presentation provides an updated overview of the state of global financial markets with a focus on the developments following the COVID-19 crisis and an assessment of market dynamics and downside risks
The document provides an economic update from the Young Fabians in August 2019. It summarizes recent UK economic developments, including GDP contracting in Q2 2019 for the first time since 2012, a weakening housing market, and slowing global growth due to trade wars. It then looks forward, noting potential GDP recovery in Q3 but continued trade tensions. Charts show declining business and consumer confidence, falling stock markets, and downgraded GDP and higher unemployment forecasts by the IMF and YFEF compared to other institutions.
This presentation provides and overview of the state of global financial markets as of October 2020 with a focus on the developments following the COVID-19 crisis and an assessment of market dynamics and downside risks
The document summarizes key findings from the 2017 OECD Business and Finance Outlook report. It addresses 8 questions on issues related to globalization and the impact of technology and trade on middle-income jobs. The summary discusses how openness and a level global playing field are important for companies to innovate and gain productivity. However, some countries use subsidies, exchange rate management and pricing strategies to gain unfair export advantages over competitors. Overall, the document argues that non-transparent practices like these undermine open markets and fair global competition.
This document provides an economic outlook and analysis for Greece from Piraeus Bank's Research Division. It discusses the divide between economic data and sentiment in Greece. It also summarizes the key aspects of Greece's third economic adjustment program, including fiscal measures and reforms. The document concludes with an outlook for real GDP growth, unemployment, inflation, and other economic indicators for Greece through 2017.
Capital-Infraestructure-spending-outlook-2016PwC España
This document summarizes key findings from a PwC report on global capital project and infrastructure spending outlooks. It discusses two scenarios - a Chinese hard landing and a global upturn scenario - and their potential impacts. Under a Chinese hard landing, global CP&I spending is projected to decline 4% between 2015-2020, with over 60% of the reduction occurring in Asia Pacific. Extraction, transport, and utilities would see the largest decreases. A global upturn could increase global CP&I expenditure by $600 billion over the same period, with the largest gains in Asia Pacific and utilities and transport sectors. The extraction sector faces challenges under both scenarios due to oil price volatility.
Highlights of recent trends in financial marketsRajendar Madasi
Financial markets have broadly strengthened after weakening in late 2005. Stock markets grew strongly in Japan and Europe, backed by both foreign and domestic demand. The financial sector outperformed in Europe, with banks and insurers rebounding from hurricane losses. Corporate bond spreads remained stable in the US and Europe.
Ey profit warning stress index q3 2018 7Robert Hussey
For those looking at a UK listing – this is a very insightful piece of research based on EY’s Profits Warning Stress Index. In Q3 2018, the market has experienced the highest average share price fall since the financial crisis. 206 earnings downgrades in the first nine months of the year. The Consumer sectors are dominating these earnings downgrades but with domestic and global uncertainty, we are seeing signs of contraction spreading wider a field (industrial and finance sectors). If one combines this with the number of recent IPO’s either being pulled or priced at the lower of the range, a cautionary picture in certainly painted.
The stock market has fallen sharply due to the COVID-19 pandemic, however, economic experts see this as an opportunity for long-term investors. The real estate market is also facing difficulties with reduced demand due to the pandemic and lack of new project launches. In the first quarter of 2020, Ho Chi Minh City only saw the introduction of 5,497 housing units from 11 new real estate projects, down significantly from previous quarters. Both the stock and real estate markets are expected to recover once the pandemic is controlled and economic support policies take effect.
Oshkosh Corporation held its 2015 Annual Shareholders' Meeting on February 3, 2015. In the meeting, Charlie Szews, the CEO, provided an overview of the company's performance in fiscal year 2014 and outlook for 2015. Key points included strong total shareholder returns, continued recovery in non-defense markets, progress growing non-defense sales and profits, and targets for further margin expansion and adjusted EPS growth in 2015. Szews committed to executing the MOVE strategy to drive shareholder value through improving customer satisfaction and returns on invested capital.
This presentation provides an updated overview of the state of global financial markets with a focus on the developments following the COVID-19 crisis and an assessment of market dynamics and downside risks. Find out more at www.oecd.org/finance
The document is a market report summarizing economic and real estate market conditions in Vietnam for Q3 2021. Some key points:
- GDP growth rate fell significantly to -6.17% compared to Q3 2020 due to strict social distancing measures. However, FDI increased 4.4% to $22.15 billion, showing continued investor confidence.
- Real estate transactions such as apartment, office, and commercial sales plunged due to the pandemic. However, average apartment prices decreased less than 5% year-over-year in major cities.
- The office market saw declines in rental prices and occupancy rates, especially in Da Nang. However, prices are expected to stabilize or increase slightly as construction
- Central banks around the world took unprecedented actions to provide liquidity and support financial markets as the COVID-19 pandemic caused turmoil. While short-term bank funding stabilized, corporate funding conditions remained strained, especially for lower-rated firms.
- Stock prices rose from their lows, but valuations are a concern given downward earnings forecasts. Bank equity prices fell on expected losses eroding profits. Sovereign and corporate debt risks rose for emerging markets.
- Uneven effects across sectors, with technology and healthcare more resilient than energy, retailers, and banks. Real estate investment trusts declined due to rental issues. Mortgage securities regained losses.
The document provides a market report for Q4 2021, summarizing key economic indicators and real estate trends in Vietnam. It finds that while Vietnam's GDP grew by 5.22% in Q4 2021, the country faced challenges from COVID-19 lockdowns. Real estate prices increased slightly for apartments, offices, and retail across major cities. The report expects modest continued growth in 2022 as vaccination rates increase and the economy reopens further.
The document discusses several major issues that will impact the global economy and foreign exchange markets in 2020. It notes that global growth is expected to remain soft at around 2.9% for the year. Inflation remains low across both developed and emerging markets. Central banks will continue easing monetary policy and reviewing their inflation targets. China's economy will continue slowing while the risk of recession in the US has decreased. The eurozone economy faces persistent weakness, especially in Germany which is dealing with short-term and structural challenges. France's economy may be more resilient than other EU nations in 2020.
---
Equity Research: PZU:WSE Equity Valuation
Doing a comprehensive research before Investment on any Publically traded EQuity is a Must. Here I presented a research that I have done already on PZU:WSE.
Powszechny Zaklad Ubezpieczen SA offers property and casualty insurance. The Company offers a wide range of non-life insurance products including fire and automobile insurance. Powszechny Zaklad also has a division that offers life insurance. They are share holder of two major Polish banks, and are also a new comer in the Health sector.
In the report below, you can find my reasoning behind a positive pulises for investment on this share in early December.
Please be advised that due to high influence of COVID-19 pandemic on PZU and all insurance companies, the 4Q2020 report of this company, about their performance and the amount of benefit they paid due to Covid, will lead to a Jump (Either Positive or negative) on its share price.
---
The document provides an overview of the state of the global and Indian economies in light of the ongoing financial crisis. Key points include:
1) The IMF has downgraded its global GDP growth forecasts for 2008 and 2009 as major economies face recession. Emerging markets will also slow substantially.
2) Housing prices and industrial production continue to decline in the US and unemployment is rising sharply. Financial markets remain volatile.
3) India's growth is moderating but inflation is slowing. However, high deficits, slowing consumption and investments, and capital outflows pose challenges.
4) Global equity markets have seen large losses in 2008 on risk aversion. Indian markets are also highly volatile though the Sensex has
ICICI Pru MF - Annual Market Outlook 2020iciciprumf
Why Divergence as the theme?
Several polarizing trends have been observed on the Global as well as Domestic front
Divergence is observed in Markets and Economy, Value and Growth theme, Yields on G-Sec and AAA over AA/A, etc
The outlook aims to highlight such divergent trends and ways to navigate the same
Brief on our Equity Outlook
Union Budget, real estate debt de-leveraging and credit growth pick-up key triggers for the markets in 2020
Stark divergence between Value and Growth themes makes Value and Special Situations themes attractive
Asset Allocation schemes may be considered to address near term volatility
Recommend Small and Multicap schemes due to reasonable valuations
Recommend adding equities in a staggered manner through SIP/STP
Our Recommendations
To benefit from Value Vs. Growth divergence - ICICI Prudential Value Discovery Fund
To benefit from Special Situations Theme - ICICI Prudential India Opportunities Fund
To benefit from reasonable valuations - ICICI Prudential Smallcap Fund
To benefit from Volatility - ICICI Prudential Balanced Advantage Fund and ICICI Prudential Asset Allocator Fund
For Long Term Wealth Creation - SIP/STP in ICICI Prudential Multicap Fund and ICICI Prudential Smallcap Fund
Brief on our Debt Outlook
Continue to remain positive on accrual space/spread assets
Recommend combination of short term assets and long term assets with a portfolio maturity range of 2-5 years
Extreme short end (less than 3 months), due to ample liquidity may give lower real returns
Fiscal concerns and inflation in the first half may keep longer end volatile. Hence, use the longer end of the yield curve for trading strategy
Our Recommendations
To earn higher accrual - ICICI Prudential Credit Risk Fund and ICICI Prudential Medium Term Bond Fund
Short/Medium Duration Scheme - ICICI Prudential Banking and PSU Debt Fund and ICICI Prudential Short Term Fund
To benefit from Volatility - ICICI Prudential All Seasons Bond Fund
Short Term Solution - ICICI Prudential Ultra Short Term Fund and ICICI Prudential Floating Interest Fund
We at Alps Venture Partners are constantly contributing towards research in Mergers & Acquisitions across geographies.
This is first in series of 2020-21 M&A Tearsheet which provides detail on the Transaction Multiples (Revenue & EBITDA), Multiples Chart, Active Buyers, Country based multiples & other transaction data observed in South East Asia.
This report provides an evidence-based overview of developments in capital markets globally leading up to the COVID-19 crisis. It then documents the impact of the crisis on the use of capital markets and the introduction of temporary corporate governance measures.
Atradius Market Monitor (Crédito y Caución) - abril 2015Ignacio Jimenez
El último informe de Crédito y Caución (Atradius) confirma que el 40% de las facturas de Europa Occidental está en mora
En España, el 44% del valor total de las facturas de clientes B2B nacionales resultó impagado a su vencimiento.
A pesar de las notables diferencias en los niveles de insolvencias, los índices de impago empresarial en Europa siguen siendo muy altos y se espera que las tasas de insolvencia continúen muy por encima de los niveles de 2007.
El impago afecta a alrededor del 40% del valor total de las facturas B2B nacionales y extranjeras, de acuerdo con los resultados de la última edición del Barómetro de Prácticas de Pago sobre Europa Occidental distribuido por Crédito y Caución. Un 7% quedaron pendientes tras permanecer vencidas y no pagadas más de 90 días, aumentando la probabilidad de convertirse en casos susceptibles de recobro, y el 1,2% resultaron incobrables. Las empresas de Italia y Grecia parecen ser las que tienen más dificultades con las cuentas por cobrar en mora e incobrables, mientras que los encuestados de Dinamarca y Suecia son los que otorgan una prioridad más destacada a la gestión de las cuentas por cobrar.
- The document provides an overview of the consumer durables/non-food retail performance and outlook in April 2016. It discusses trends in several countries including Germany, the Netherlands, and the United Kingdom.
- In most markets, margins of consumer durables retailers remain tight as consumers remain price sensitive. Competition from online retailers also puts pressure on margins.
- The document analyzes factors like sales growth, profitability, insolvency levels, and payment behavior in several consumer durables retail markets. It provides outlooks on the performance of the sector in different countries.
Every month, Atradius brings you an up to the minute snapshot report on a range of export markets and key trade sectors. Our underwriters have a specialist view of the world economy – and the industries that make that economy tick - that you won’t find in the general press coverage of events.
Even more importantly, our underwriters use their expertise and experience to look to the future. In each edition of Atradius Market Monitor you’ll find our outlook for a number of key market economies.
In this issue…
…we feature the following markets:
The Netherlands – with a spotlight on construction and transport industry sectors
Spain – with a spotlight on construction and automotive industry sectors
United States of America
Belgium
Austria
Ireland
Poland
Indonesia
Seedrs completed 375 deals between July 2012 and September 2016. These deals ranged across 15 sectors, with no sector accounting for more than 11% of deals. Most deals were small (less than £100,000), and the majority involved businesses that were at least partially digital. As of September 2016, a hypothetical portfolio investing in all 375 deals would have achieved a 14.4% annualized return before taxes.
This presentation provides and overview of the state of global financial markets as of October 2020 with a focus on the developments following the COVID-19 crisis and an assessment of market dynamics and downside risks
The document summarizes key findings from the 2017 OECD Business and Finance Outlook report. It addresses 8 questions on issues related to globalization and the impact of technology and trade on middle-income jobs. The summary discusses how openness and a level global playing field are important for companies to innovate and gain productivity. However, some countries use subsidies, exchange rate management and pricing strategies to gain unfair export advantages over competitors. Overall, the document argues that non-transparent practices like these undermine open markets and fair global competition.
This document provides an economic outlook and analysis for Greece from Piraeus Bank's Research Division. It discusses the divide between economic data and sentiment in Greece. It also summarizes the key aspects of Greece's third economic adjustment program, including fiscal measures and reforms. The document concludes with an outlook for real GDP growth, unemployment, inflation, and other economic indicators for Greece through 2017.
Capital-Infraestructure-spending-outlook-2016PwC España
This document summarizes key findings from a PwC report on global capital project and infrastructure spending outlooks. It discusses two scenarios - a Chinese hard landing and a global upturn scenario - and their potential impacts. Under a Chinese hard landing, global CP&I spending is projected to decline 4% between 2015-2020, with over 60% of the reduction occurring in Asia Pacific. Extraction, transport, and utilities would see the largest decreases. A global upturn could increase global CP&I expenditure by $600 billion over the same period, with the largest gains in Asia Pacific and utilities and transport sectors. The extraction sector faces challenges under both scenarios due to oil price volatility.
Highlights of recent trends in financial marketsRajendar Madasi
Financial markets have broadly strengthened after weakening in late 2005. Stock markets grew strongly in Japan and Europe, backed by both foreign and domestic demand. The financial sector outperformed in Europe, with banks and insurers rebounding from hurricane losses. Corporate bond spreads remained stable in the US and Europe.
Ey profit warning stress index q3 2018 7Robert Hussey
For those looking at a UK listing – this is a very insightful piece of research based on EY’s Profits Warning Stress Index. In Q3 2018, the market has experienced the highest average share price fall since the financial crisis. 206 earnings downgrades in the first nine months of the year. The Consumer sectors are dominating these earnings downgrades but with domestic and global uncertainty, we are seeing signs of contraction spreading wider a field (industrial and finance sectors). If one combines this with the number of recent IPO’s either being pulled or priced at the lower of the range, a cautionary picture in certainly painted.
The stock market has fallen sharply due to the COVID-19 pandemic, however, economic experts see this as an opportunity for long-term investors. The real estate market is also facing difficulties with reduced demand due to the pandemic and lack of new project launches. In the first quarter of 2020, Ho Chi Minh City only saw the introduction of 5,497 housing units from 11 new real estate projects, down significantly from previous quarters. Both the stock and real estate markets are expected to recover once the pandemic is controlled and economic support policies take effect.
Oshkosh Corporation held its 2015 Annual Shareholders' Meeting on February 3, 2015. In the meeting, Charlie Szews, the CEO, provided an overview of the company's performance in fiscal year 2014 and outlook for 2015. Key points included strong total shareholder returns, continued recovery in non-defense markets, progress growing non-defense sales and profits, and targets for further margin expansion and adjusted EPS growth in 2015. Szews committed to executing the MOVE strategy to drive shareholder value through improving customer satisfaction and returns on invested capital.
This presentation provides an updated overview of the state of global financial markets with a focus on the developments following the COVID-19 crisis and an assessment of market dynamics and downside risks. Find out more at www.oecd.org/finance
The document is a market report summarizing economic and real estate market conditions in Vietnam for Q3 2021. Some key points:
- GDP growth rate fell significantly to -6.17% compared to Q3 2020 due to strict social distancing measures. However, FDI increased 4.4% to $22.15 billion, showing continued investor confidence.
- Real estate transactions such as apartment, office, and commercial sales plunged due to the pandemic. However, average apartment prices decreased less than 5% year-over-year in major cities.
- The office market saw declines in rental prices and occupancy rates, especially in Da Nang. However, prices are expected to stabilize or increase slightly as construction
- Central banks around the world took unprecedented actions to provide liquidity and support financial markets as the COVID-19 pandemic caused turmoil. While short-term bank funding stabilized, corporate funding conditions remained strained, especially for lower-rated firms.
- Stock prices rose from their lows, but valuations are a concern given downward earnings forecasts. Bank equity prices fell on expected losses eroding profits. Sovereign and corporate debt risks rose for emerging markets.
- Uneven effects across sectors, with technology and healthcare more resilient than energy, retailers, and banks. Real estate investment trusts declined due to rental issues. Mortgage securities regained losses.
The document provides a market report for Q4 2021, summarizing key economic indicators and real estate trends in Vietnam. It finds that while Vietnam's GDP grew by 5.22% in Q4 2021, the country faced challenges from COVID-19 lockdowns. Real estate prices increased slightly for apartments, offices, and retail across major cities. The report expects modest continued growth in 2022 as vaccination rates increase and the economy reopens further.
The document discusses several major issues that will impact the global economy and foreign exchange markets in 2020. It notes that global growth is expected to remain soft at around 2.9% for the year. Inflation remains low across both developed and emerging markets. Central banks will continue easing monetary policy and reviewing their inflation targets. China's economy will continue slowing while the risk of recession in the US has decreased. The eurozone economy faces persistent weakness, especially in Germany which is dealing with short-term and structural challenges. France's economy may be more resilient than other EU nations in 2020.
---
Equity Research: PZU:WSE Equity Valuation
Doing a comprehensive research before Investment on any Publically traded EQuity is a Must. Here I presented a research that I have done already on PZU:WSE.
Powszechny Zaklad Ubezpieczen SA offers property and casualty insurance. The Company offers a wide range of non-life insurance products including fire and automobile insurance. Powszechny Zaklad also has a division that offers life insurance. They are share holder of two major Polish banks, and are also a new comer in the Health sector.
In the report below, you can find my reasoning behind a positive pulises for investment on this share in early December.
Please be advised that due to high influence of COVID-19 pandemic on PZU and all insurance companies, the 4Q2020 report of this company, about their performance and the amount of benefit they paid due to Covid, will lead to a Jump (Either Positive or negative) on its share price.
---
The document provides an overview of the state of the global and Indian economies in light of the ongoing financial crisis. Key points include:
1) The IMF has downgraded its global GDP growth forecasts for 2008 and 2009 as major economies face recession. Emerging markets will also slow substantially.
2) Housing prices and industrial production continue to decline in the US and unemployment is rising sharply. Financial markets remain volatile.
3) India's growth is moderating but inflation is slowing. However, high deficits, slowing consumption and investments, and capital outflows pose challenges.
4) Global equity markets have seen large losses in 2008 on risk aversion. Indian markets are also highly volatile though the Sensex has
ICICI Pru MF - Annual Market Outlook 2020iciciprumf
Why Divergence as the theme?
Several polarizing trends have been observed on the Global as well as Domestic front
Divergence is observed in Markets and Economy, Value and Growth theme, Yields on G-Sec and AAA over AA/A, etc
The outlook aims to highlight such divergent trends and ways to navigate the same
Brief on our Equity Outlook
Union Budget, real estate debt de-leveraging and credit growth pick-up key triggers for the markets in 2020
Stark divergence between Value and Growth themes makes Value and Special Situations themes attractive
Asset Allocation schemes may be considered to address near term volatility
Recommend Small and Multicap schemes due to reasonable valuations
Recommend adding equities in a staggered manner through SIP/STP
Our Recommendations
To benefit from Value Vs. Growth divergence - ICICI Prudential Value Discovery Fund
To benefit from Special Situations Theme - ICICI Prudential India Opportunities Fund
To benefit from reasonable valuations - ICICI Prudential Smallcap Fund
To benefit from Volatility - ICICI Prudential Balanced Advantage Fund and ICICI Prudential Asset Allocator Fund
For Long Term Wealth Creation - SIP/STP in ICICI Prudential Multicap Fund and ICICI Prudential Smallcap Fund
Brief on our Debt Outlook
Continue to remain positive on accrual space/spread assets
Recommend combination of short term assets and long term assets with a portfolio maturity range of 2-5 years
Extreme short end (less than 3 months), due to ample liquidity may give lower real returns
Fiscal concerns and inflation in the first half may keep longer end volatile. Hence, use the longer end of the yield curve for trading strategy
Our Recommendations
To earn higher accrual - ICICI Prudential Credit Risk Fund and ICICI Prudential Medium Term Bond Fund
Short/Medium Duration Scheme - ICICI Prudential Banking and PSU Debt Fund and ICICI Prudential Short Term Fund
To benefit from Volatility - ICICI Prudential All Seasons Bond Fund
Short Term Solution - ICICI Prudential Ultra Short Term Fund and ICICI Prudential Floating Interest Fund
We at Alps Venture Partners are constantly contributing towards research in Mergers & Acquisitions across geographies.
This is first in series of 2020-21 M&A Tearsheet which provides detail on the Transaction Multiples (Revenue & EBITDA), Multiples Chart, Active Buyers, Country based multiples & other transaction data observed in South East Asia.
This report provides an evidence-based overview of developments in capital markets globally leading up to the COVID-19 crisis. It then documents the impact of the crisis on the use of capital markets and the introduction of temporary corporate governance measures.
Atradius Market Monitor (Crédito y Caución) - abril 2015Ignacio Jimenez
El último informe de Crédito y Caución (Atradius) confirma que el 40% de las facturas de Europa Occidental está en mora
En España, el 44% del valor total de las facturas de clientes B2B nacionales resultó impagado a su vencimiento.
A pesar de las notables diferencias en los niveles de insolvencias, los índices de impago empresarial en Europa siguen siendo muy altos y se espera que las tasas de insolvencia continúen muy por encima de los niveles de 2007.
El impago afecta a alrededor del 40% del valor total de las facturas B2B nacionales y extranjeras, de acuerdo con los resultados de la última edición del Barómetro de Prácticas de Pago sobre Europa Occidental distribuido por Crédito y Caución. Un 7% quedaron pendientes tras permanecer vencidas y no pagadas más de 90 días, aumentando la probabilidad de convertirse en casos susceptibles de recobro, y el 1,2% resultaron incobrables. Las empresas de Italia y Grecia parecen ser las que tienen más dificultades con las cuentas por cobrar en mora e incobrables, mientras que los encuestados de Dinamarca y Suecia son los que otorgan una prioridad más destacada a la gestión de las cuentas por cobrar.
- The document provides an overview of the consumer durables/non-food retail performance and outlook in April 2016. It discusses trends in several countries including Germany, the Netherlands, and the United Kingdom.
- In most markets, margins of consumer durables retailers remain tight as consumers remain price sensitive. Competition from online retailers also puts pressure on margins.
- The document analyzes factors like sales growth, profitability, insolvency levels, and payment behavior in several consumer durables retail markets. It provides outlooks on the performance of the sector in different countries.
Every month, Atradius brings you an up to the minute snapshot report on a range of export markets and key trade sectors. Our underwriters have a specialist view of the world economy – and the industries that make that economy tick - that you won’t find in the general press coverage of events.
Even more importantly, our underwriters use their expertise and experience to look to the future. In each edition of Atradius Market Monitor you’ll find our outlook for a number of key market economies.
In this issue…
…we feature the following markets:
The Netherlands – with a spotlight on construction and transport industry sectors
Spain – with a spotlight on construction and automotive industry sectors
United States of America
Belgium
Austria
Ireland
Poland
Indonesia
Seedrs completed 375 deals between July 2012 and September 2016. These deals ranged across 15 sectors, with no sector accounting for more than 11% of deals. Most deals were small (less than £100,000), and the majority involved businesses that were at least partially digital. As of September 2016, a hypothetical portfolio investing in all 375 deals would have achieved a 14.4% annualized return before taxes.
Credit Suisse Analysis Brasil 2019-2020Edward Lange
- The document discusses Brazil's positive economic outlook for 2019-2020 based on continued recovery, low inflation, and gradual normalization of monetary policy. However, successful fiscal reforms, especially of social security, are needed to stabilize public debt.
- The new administration faces challenges of low growth, deteriorating public finances, and needs to implement productivity and fiscal reforms to put Brazil on a sustainable path. Reforms like tax changes, opening the economy, and education are part of the productivity agenda.
- Risks include a weak social security reform, faster foreign tightening, and weaker China; opportunities include faster reforms to boost growth and asset prices. The fiscal agenda is the main domestic risk over the outlook period.
This document brings together a set
of latest data points and publicly
available information relevant for
Financial Services. We are very
excited to share this content and
believe that readers will benefit from
this periodic publication immensely.
Between 2009-2014, emerging market companies grew 3 times faster than mature market companies despite economic headwinds. This growth is projected to continue due to favorable demographic and consumption trends in emerging markets, including population and urban growth as well as rising consumer spending. New local companies in emerging markets could also become sector leaders within 10 years, with the largest numbers located in China, South Asia, and Africa.
- The Total Asset Partners portfolio returned 7.53% gross and 6.34% net for 2016. Returns were supported by equities offsetting losses in municipal bonds.
- For the fourth quarter, returns were 0.83% gross and 0.26% net. The portfolio has outperformed benchmarks like the S&P 500 and Barclays Aggregate index on a year-to-date basis with lower volatility.
- The document discusses economic and market outlooks, noting expectations for modest US growth around 2-2.5% in 2017, potential for higher inflation and interest rates, and risks from a strong US dollar.
The global financial services industry has undergone a decade of re-regulation since the 2008 financial crisis. Deregulation in the 1980s-2000s led to consolidation, universal banks offering many products, and shadow banking growth. However, the 2008 crisis showed the system was unstable. Since then, waves of new regulation have reshaped the industry through 2020, including Basel III, Solvency II, and FATCA. As 2013 begins, the industry is adapting long-term to the new landscape while regulatory deadlines start to take effect.
This document summarizes John Sznewajs' presentation at the 39th Annual Institutional Investor Conference in March 2018. The presentation discusses Masco's business today, strategy for profitable growth, and future outlook. Masco has a diversified business mix across price points, channels, and geographies that results in stable revenues. The company's strategy focuses on driving the full potential of its businesses, leveraging opportunities across its portfolio, and actively managing its portfolio. Masco expects this strategy to generate substantial cash flow and allow for 23% annual EPS growth from 2016 to 2019 through revenue growth, cost improvements, and capital allocation.
The document outlines Banca IFIS's strategic plan for 2017-2019. It discusses the bank's vision, past performance, and future goals. Key points include:
- Past performance showed strong growth from 2016 with loans up 72.5%, equity up 112.5%, and net profit up 324.7%.
- The strategic plan aims for continued growth across all business segments including trade receivables, corporate banking, and leasing.
- Goals for the next 3 years include increasing net profit at a CAGR of 40-45% and achieving an ROE over 15% and EPS over €4.5 by 2019.
- The bank will focus on diversifying funding sources, maintaining high
BBVA reported its results for the second quarter of 2018. Key highlights included:
- Solid core revenue growth and improved efficiency leading to higher profits.
- Positive trends in digital sales and customers with digital transactions increasing 40.6% year-on-year.
- Sound risk indicators with the NPL ratio at 4.4% and coverage ratio at 71%.
- Continued focus on shareholder value with a proposed shareholders' remuneration of 11.40% of capital.
Santander delivered strong financial performance in 2016, with underlying profit before tax increasing 12% year-on-year in constant euros. Attributable profit grew 4% year-on-year. Loans increased 2% and funds grew 5% in constant euros. The CET1 ratio improved 50 basis points to 10.55%. Santander saw widespread growth across regions, particularly in developing markets like Mexico, Chile, and Argentina. Double-digit profit growth was driven by higher customer revenues and lower costs of credit.
This document summarizes the results of the 2019 Taiwan Business Climate Survey conducted amongst over 200 key business leaders in Taiwan. The survey found that profitability levels are at their lowest in 9 years, with forecasts for 2019 revenues, profits, and investment declining or flat compared to previous years. Employment growth is also forecast to slow. Issues such as governmental bureaucracy, differences from international standards, protectionism, and inadequate laws continue to negatively impact businesses. Survey respondents see Taiwanese workers as hardworking but lacking creativity and initiative. The outlook for the next 5 years is sluggish, with less than half of respondents optimistic. In summary, the survey finds Taiwan's business climate deteriorating, with recurring issues still not adequately addressed.
2019 taiwan business_climate_study_-_jan_10Gordon Stewart
This document summarizes the results of the 2019 Taiwan Business Climate Survey conducted amongst over 200 key business leaders in Taiwan. It finds that profitability levels are at their lowest in 9 years, with forecasts for 2019 revenues, profits, and investment declining or flat compared to previous years. Employment growth is also forecast to slow. Persistent issues identified include governmental bureaucracy, differences between local and international standards, domestic protectionism, and inadequate or outdated laws. The ability to recruit qualified personnel and increasing labor costs are also major impacts. The survey concludes the outlook for business in Taiwan over the next 5 years is sluggish.
- Santander reported results for Q1 2018 with profits growing 10% year-over-year to EUR 2,054 million, driven by strong performance across most business areas.
- Key highlights included growth in loyal and digital customers, higher net interest income and fees, and lower provisions as asset quality continued to improve.
- Capital levels remained strong with a fully loaded CET1 ratio of 11.0%, positioning Santander well to meet 2018 targets.
Intact Financial Corporation is Canada's largest home, auto and business insurer with over $4 billion in annual direct premiums written. It has a dominant market share in Ontario, Quebec, Alberta and Nova Scotia. Intact has consistently outperformed the Canadian P&C insurance industry in terms of premium growth, combined ratios and returns on equity over the past 10 years. The company has a strong financial position with $8.2 billion in invested assets and excess capital of $766 million. Intact plans to continue growing organically through rate increases and expanding its broker relationships, direct and affinity brands. It also aims to participate in industry consolidation through its $1 billion acquisition capacity.
Intact Financial Corporation is Canada's largest home, auto and business insurer with over $4 billion in annual direct premiums written. It has a dominant market share in Ontario, Quebec, Alberta and Nova Scotia. Intact has consistently outperformed the Canadian P&C insurance industry in terms of premium growth, combined ratios and returns on equity over the past 10 years. The company has a strong financial position with $8.2 billion in invested assets and excess capital of $766 million. Intact plans to continue growing organically through rate increases and expanding its broker relationships, direct and affinity brands. It also aims to participate in industry consolidation through its $1 billion acquisition capacity.
Mercer Capital's Value Focus: Auto Dealer Industry | Mid-Year 2015Mercer Capital
The auto industry was hit hard by the Great Recession as unemployment rose and consumer spending declined. Auto sales tumbled and GM and Chrysler filed for bankruptcy. The industry began recovering in 2009 as disposable incomes rose and consumers were able to purchase durable goods like cars again. However, the auto dealer industry now faces pressures from increased regulation, shifting demand toward electric vehicles, and new entrants in the market. The document examines various macroeconomic indicators to analyze the current state and future outlook of the auto dealer industry.
Mercer Capital's Value Focus: Insurance Industry | Q3 2015Mercer Capital
Mercer Capital’s Insurance Industry newsletter is a quarterly publication providing perspective on valuation issues pertinent to insurance brokers, underwriters, and other industry professionals. Each issue includes a segment focus, market overview, mergers and acquisitions review, and more.
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2. Disclaimer
This report is provided for information purposes only and is not intended as a recommendation
or advice as to particular transactions, investments or strategies in any way to any reader. Read-
ers must make their own independent decisions, commercial or otherwise, regarding the infor-
mation provided. While we have made every attempt to ensure that the information contained
in this report has been obtained from reliable sources, Atradius is not responsible for any errors
or omissions, or for the results obtained from the use of this information. All information in this
report is provided ’as is’, with no guarantee of completeness, accuracy, timeliness or of the re-
sults obtained from its use, and without warranty of any kind, express or implied. In no event will
Atradius, its related partnerships or corporations, or the partners, agents or employees thereof,
be liable to you or anyone else for any decision made or action taken in reliance on the informa-
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Copyright Atradius N.V. 2016
3. MARKETPERFORMANCE
ATAGLANCE
FULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
3
TABLEOFCONTENS
Introduction More solid foundations..............................................................4
Full reports
France Still a high level of payment delays......................................5
Germany Growth expected to accelerate in 2016...............................7
Italy Smaller players still face more troubles..............................9
The Netherlands A one-sided recovery............................................................... 11
United States The robust performance is expected to continue
in 2016......................................................................................... 13
Market performance snapshots
Belgium Growth expected to remain subdued in 2016................ 15
Spain Finally a rebound is underway............................................ 16
United Kingdom Many insolvencies in 2015................................................... 17
Market performance at a glance
Australia, India, Japan, Mexico, Turkey,
United Arab Emirates.............................................................. 18
Overview chart Industries performance per country................................. 22
Industry performance Changes since December 2015 ........................................... 24
In this issue…
On the following pages we indicate the general outlook for each sector
featured using these symbols:
Excellent Good Fair Poor Bleak
4. 4
MARKETPERFORMANCE
ATAGLANCE
TABLEOFCONTENSFULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
After the major shake-up of the global construction industry
caused by the 2008 financial crisis, a return to economic normal-
cy has become visible, albeit at varying degrees across regions
and countries.
Developed markets are set for a more positive near-term outlook
than in previous years, as the fallout from the global financial
crisis recedes, household incomes recover, and public finances
improve. It seems that in countries like France, Italy the Nether-
lands and Spain the construction recession has started to bottom
out, while the US and Germany already record persistent growth.
At the same time, the current economic slowdown in China has
consequences on construction performance in other countries,
as it triggered decreasing commodity demand and prices. Mining
construction in Australia is an example showing how the building
industry and major commodity exporters are negatively affect-
ed by China´s slowdown. The sharp decline in oil prices impacts
construction in a positive and negative way: while it seriously
hampers building activities in oil-producing countries like the
United Arab Emirates and has hit the energy-related construc-
tion segment in the US hard, it could help construction activity in
other markets indirectly, by relieving public budget burdens (e.g.
in India it leaves more room for infrastructure spending) and by
increasing disposable household incomes. Additionally, oil-relat-
ed construction materials have become cheaper.
However, while construction businesses in most countries cov-
ered by this Market Monitor benefit from lower commodity pric-
es, the positive effect on their financials is mostly offset by high
competition and pressure on prices, which continue to strain
profit margins. Late payments and cash flow problems of small-
er players remain an issue for the industry. While construction
insolvencies are expected to level off or even to decrease in many
countries, the proportion of business failures in this sector is still
higher than in most other industries.
More solid foundations
5. 5
MARKETPERFORMANCE
ATAGLANCE
TABLEOFCONTENSFULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
France
77 Construction activity decreased 3% in 2015
77 Still a high level of payment delays
77 A modest rebound expected in 2016
Overview
Credit risk assessment
significantly
improving improving stable deteriorating
significantly
deteriorating
Trend in non-payments over
the last 6 months
✔
Development of non-payments
over the coming 6 months
✔
Trend in insolvencies over
the last 6 months
✔
Development of insolvencies over
the coming 6 months
✔
Financing conditions very high high average low very low
Dependence on bank finance ✔
Overall indebtedness of the sector ✔
Willingness of banks to provide
credit to this sector
✔
Business conditions
significantly
improving improving stable deteriorating
significantly
deteriorating
Profit margins: general trend
over the last 12 months
✔
General demand situation (sales) ✔
Source: Atradius
Construction accounts for 4.9% of French GDP, with 540,000
companies employing about 1.5 million people. The sector con-
sists mainly of small businesses (about 95% of construction busi-
nesses have 1-10 employees), with just about 200 companies
employing more than 200 people, and some larger, internation-
ally active players like Bouygues, Vinci and Eiffage.
According to the French builders association FFB (Federation
Française du Bâtiment), in 2015 French construction activity
continued to deteriorate (down 3% in volume), the seventh year
of decrease since the major recession of 2008. The sector was
negatively impacted by still sluggish economic growth (0.2% in
2014 and 1.1% in 2015), low household purchasing power (due
to persisting high unemployment and unfavourable fiscal meas-
ures) and public budget spending constraints – all hampering
construction investment.
According to FFB, new residential construction output decreased
3.9% in volume in 2015, with the number of housing starts re-
maining low. In the non-residential subsector public construction
decreased 18%, while the private segment recorded a 6.6% de-
cline. The level of activity, employment, backlog and production
capacity remained very low compared to the long-term average.
Given the poor construction performance and low demand in
previous years, it comes as no surprise that French construction
businesses face many difficulties. Revenues and investments are
low, competition is fierce, and prices and profitability are both
being squeezed. Major players keep putting pressure on their
subcontractors, and banks remain very selective with their loans,
making access to short-term credit difficult. Additionally, the fi-
nancial situation of construction businesses is often impacted
by the ‘scissor effect’ of low margins and long payment delays.
6. 6
MARKETPERFORMANCE
ATAGLANCE
TABLEOFCONTENSFULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
The adverse market conditions with strong competition and fee-
ble demand prevent companies from price increases, while high
personal costs weigh on businesses´ budgets. Due to continued
difficult access to short-term credit facilities, cash management
remains a major issue. In 2015 both non-payment notifications
and insolvencies increased further.
In 2016, construction output is expected to rebound 2.5%, with
residential construction activity expected to grow 5.5%, helped
by government support for new buildings and modernisation
(e.g. tax exemptions and reductions for real estate investors and
first-time buyers and VAT reduction for finishing) and increas-
ing loans for real estate acquisitions by private households. That
said, non-residential construction activity is expected to remain
subdued, especially in the public construction segment. Public
works will likely continue to suffer from poor investments: The
government has reduced funds allocated to local authorities by
nearly EUR 12 billion from 2015 to 2017 (approx. EUR 4 billion
per year) as part of an overall cost cutting program of EUR 50
billion over three years to tackle the public deficit. Maintenance,
renovation and repair are expected to increase 0.4%. While both
non-payment notifications and insolvencies are not expected to
increase further in H1 of 2016, their level will remain high.
Despite the expected rebound, we must remain cautious in our
underwriting stance, but we still provide cover to our custom-
ers whenever it is reasonable and prudent to do so. We closely
monitor and review buyers to anticipate potential high risks to
our customers. We focus on the cash situation and loan facilities
available to buyers, especially smaller and mid-sized companies.
Several key financial indicators must be analysed: the level of ac-
tivity, margins and ability to fund working capital requirements.
High financial costs are a key indicator of potential pressure on
cash.
French construction sector
Strengths
Structural lack of housing due to the
demographic development (growing
population)
Still low interest rates
Weaknesses
Feeble economic growth and measures to
curb the high public deficit
High unemployment
Costs rising faster than prices
Source: Atradius
France: construction sector
2014 2015f 2016f
GDP growth (%) 0.2 1.1 1.3
Sector value added
growth (%) -0.7 -0.6 1.6
Sector share in the national economy (%) 4.9
Average sector growth over the past
3 years (%) -1.0
Average sector growth over the past
5 years (%) -1.7
Degree of export orientation
very
low
Degree of competition high
Sources: IHS, Atradius
7. 7
MARKETPERFORMANCE
ATAGLANCE
TABLEOFCONTENSFULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
Germany
77 Growth expected to accelerate in 2016
77 Poor payment behaviour of public buyers remains an issue
77 Decrease in insolvencies slowing down
Overview
Credit risk assessment
significantly
improving improving stable deteriorating
significantly
deteriorating
Trend in non-payments over
the last 6 months
✔
Development of non-payments
over the coming 6 months
✔
Trend in insolvencies over
the last 6 months
✔
Development of insolvencies over
the coming 6 months
✔
Financing conditions very high high average low very low
Dependence on bank finance ✔
Overall indebtedness of the sector ✔
Willingness of banks to provide
credit to this sector
✔
Business conditions
significantly
improving improving stable deteriorating
significantly
deteriorating
Profit margins: general trend
over the last 12 months
✔
General demand situation (sales) ✔
Source: Atradius
The German construction sector accounts for 3.3% of German
GDP. Within the industry, 90% are small businesses (less than
20 employees) accounting for 45% of total construction turno-
ver. 35% of sector turnover is realised by companies with 20 to
100 employees, and the remaining 20% turnover share is gener-
ated by large companies with more than 100 employees. Small
companies are mainly focused on residential construction (about
70% of operations), while large building companies generate
most of their turnover abroad.
The performance of the German construction sector continued
to be positive in 2015, although turnover growth slowed down to
1% after a 4.1% increase in 2014. According to the German Build-
ers Association, turnover growth will increase 3% in 2016, to EUR
103 billion. Residential construction is expected to increase 5%,
driven by a high employment rate, low interest rates and the
need to provide new housing for the high number of refugees
and asylum seekers. Public construction is expected to increase
4% due to higher infrastructure investment, while commercial
building output is forecast to level off this year.
On average, payments in the German construction sector take
around 45-50 days. Instances of payment default decreased
again in 2015, and this positive trend is expected to continue
in H1 of 2016. Construction businesses´ dependence on bank
finance is not overly high, given that payments in advance or in-
stalment payments by investors are a major source of financing.
However, the poor payment behaviour of public buyers still re-
mains an issue, as it puts a strain on suppliers’ liquidity. With
demand increasing and profit margins stable, construction in-
solvencies have decreased in recent years and are expected to
decline further in 2016, in line with the overall trend in Germany
(business insolvencies in Germany are expected to decrease 2%
8. 8
MARKETPERFORMANCE
ATAGLANCE
TABLEOFCONTENSFULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
in 2016 after a 5% decline in 2015). However, the proportion of
insolvencies in the construction sector is still higher than in other
industries. According to Creditreform, in H1 of 2015 there were
95 insolvencies per 10,000 firms in the construction industry,
compared to 43 per 10,000 in the manufacturing sector.
Due to the good performance of the German construction and
construction materials sector in the last couple of years and the
promising business outlook for 2016, our underwriting stance
for the industry remains quite relaxed. In general, when assess-
ing buyer risk we take into account operating results, equity, li-
quidity and financing (e.g. the ratio ofwork in progress/advanced
payments) and orders in hand.
Despite our broadly open stance, we still consider the construc-
tion sector to be a riskier than other industries. Many construc-
tion companies – especially smaller ones – traditionally have
weak equity ratios (the proportion of equity used to finance a
company’s assets) and limited financial scope. With less back-
ground information to work with, we are naturally very cautious
when assessing the creditworthiness of construction/construc-
tion materials businesses that have operated for less than one
year, unless they are part of, or a spin off from, a larger group.
Where we identify poor creditworthiness and negative opera-
tional results, our underwriting stance is naturally very restric-
tive.
Businesses that are mainly active for public customers (road and
railway and other infrastructure construction) often face delayed
payments by their clients, which could put a strain on their liquid-
ity. Therefore, our underwriting approach towards this segment
is more cautious, and we hold additional reviews.
German construction sector
Strengths
Solid performance since 2010 helped by
a robust German economy
Significant amount of specialisation,
mainly in construction services
Strong in technical innovations
especially in the area of energy-efficiency
Weaknesses
Very high number of small companies
active in this sector
Limited access to international capital
markets
Source: Atradius
Germany: construction sector
2014 2015f 2016f
GDP growth (%) 1.6 1.7 2.0
Sector value added
growth (%) 2.7 2.5 4.1
Sector share in the national economy (%) 3.3
Average sector growth over the past
3 years (%) 1.3
Average sector growth over the past
5 years (%) 3.2
Degree of export orientation low
Degree of competition high
Sources: IHS, Atradius
9. 9
MARKETPERFORMANCE
ATAGLANCE
TABLEOFCONTENSFULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
Italy
77 The recession is expected to have bottomed out
77 Smaller players still face more troubles
77 Banks remain reluctant to lend
Overview
Credit risk assessment
significantly
improving improving stable deteriorating
significantly
deteriorating
Trend in non-payments over
the last 6 months
✔
Development of non-payments
over the coming 6 months
✔
Trend in insolvencies over
the last 6 months
✔
Development of insolvencies over
the coming 6 months
✔
Financing conditions very high high average low very low
Dependence on bank finance ✔
Overall indebtedness of the sector ✔
Willingness of banks to provide
credit to this sector
✔
Business conditions
significantly
improving improving stable deteriorating
significantly
deteriorating
Profit margins: general trend
over the last 12 months
✔
General demand situation (sales) ✔
Source: Atradius
The Italian construction sector accounts for 4.8% of the coun-
try´s GDP. The industry was severely affected by the economic
downturn in recent years, with yearly GDP contractions between
2012-2014. Since the global credit crisis in 2008, Italian con-
struction lost nearly 50% of production value and 69,000 em-
ployees due to the economic slump, decreased public spending,
declined private investment and a profound credit crunch.
However, not all businesses have been equally affected by the
downturn. Most large construction companies have proved to
be resilient due to their portfolio diversification of infrastructure
works and export orientation. For example, in 2014 construction
turnover generated by exports increased 9.7%, partly compen-
sating for the slowdown of domestic turnover (down 6%). While
this mainly benefited larger players, construction cooperatives
and consortiums focused on the domestic market and depend-
ent on public works have been severely hit by deteriorating de-
mand and decreasing bank loans. Another major issue are late
payments from public bodies, with an average payment duration
of 177 days and unpaid bills amounting to EUR 8 billion in 2015.
Small and medium-sized businesses focused on residential con-
struction was the business segment most severely affected by
the decline, due to decreased investment in private housing and
restricted bank loans. The only exception was renovation works
supported by government incentives.
Since the end of 2014 deterioration in the Italian construction
sector started to slow, as the economy rebounded modestly
(GDP grew 0.7% in 2015). According to the Italian Statistics Insti-
tute ISTAT, contraction in construction production slowed down
to 2.6% year-on-year in January-October 2015, after a 6.9% de-
cline in January-October 2014. However, market indicators re-
main negative for investments in public housing and public in-
frastructure spending.
10. 10
MARKETPERFORMANCE
ATAGLANCE
TABLEOFCONTENSFULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
In 2016 the Italian economy is forecast to grow 1%, and construc-
tion production is expected to decrease only 0.5%. Investments
are expected to increase 3.2%, driven by public investments and
by investments for extraordinary maintenance of existing build-
ings (up 1.5%), while investments in new housing is expected to
decrease again (down 3%).
Construction insolvencies still increased in 2015, among them
three established building consortiums. Business failures are not
expected to decrease substantially in 2016 and to remain on a
historically high level – in contrast to the forecast for all Italian
business insolvencies, which are expected to decrease 4% in
2016. Cooperatives and SMEs focused on domestic residential
construction remain highly exposed to the risk of business fail-
ure. Trade payables and receivables days are expected to remain
long, with no remarkable improvement in liquidity and in the
payment performance of the industry.
Banks are still very restrictive when it comes to providing loans to
construction businesses, while loans for private housing projects
also remain subdued – although the European Central Bank´s
Quantitative Easing programme is addressed to inject liquidity
and encourage investments. Many businesses in the sector re-
main highly geared.
Therefore, our underwriting stance remains restrictive. It seems
that the recession has bottomed out, but a profound recovery is
not yet on the horizon. However, underwriting is more open for
construction players who are export-oriented and less depend-
ent on the domestic public sector.
When underwriting construction businesses, we pay special at-
tention to the quality of the credit portfolio, the order situation
and the coverage with prepayments, the amount and maturity
of debt, and the ability of cash flow to cover investments and
service debt. Financial leverage has to be coherent with available
liquidity and equity consistency. With more sensitive and large
cases, there are meetings with buyers to get a better insight into
their business and financial strategies.
Italian construction sector
Strengths
Larger players benefit from export
demand
Weaknesses
Still weak domestic demand
Restrictive bank lending
Smaller businesses lack financial
resilience
Source: Atradius
Italy: construction sector
2014 2015f 2016f
GDP growth (%) -0.4 0.7 1.0
Sector value added
growth (%) -6.9 -1.3 1.8
Sector share in the national economy (%) 4.8
Average sector growth over the past
3 years (%) -6.2
Average sector growth over the past
5 years (%) -5.2
Degree of export orientation
very
low
Degree of competition high
Sources: IHS, Atradius
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SNAPSHOTS
The Netherlands
77 A one-sided recovery
77 Margins remain under pressure
77 Consolidation has yet to take place
Overview
Credit risk assessment
significantly
improving improving stable deteriorating
significantly
deteriorating
Trend in non-payments over
the last 6 months
✔
Development of non-payments
over the coming 6 months
✔
Trend in insolvencies over
the last 6 months
✔
Development of insolvencies over
the coming 6 months
✔
Financing conditions very high high average low very low
Dependence on bank finance ✔
Overall indebtedness of the sector ✔
Willingness of banks to provide
credit to this sector
✔
Business conditions
significantly
improving improving stable deteriorating
significantly
deteriorating
Profit margins: general trend
over the last 12 months
✔
General demand situation (sales) ✔
Source: Atradius
Following two years of contraction, the Dutch construction sec-
tor finally rebounded in 2014, with turnover growing 1.5%. This
recovery continued in 2015, in line with the pick-up of economic
growth in the Netherlands (GDP up 2.1%). It is estimated that con-
struction production volumes increased 3% in 2015, and further
growth is expected in 2016. Home prices have recovered, and
the sentiment of many construction companies has turned to be
more positive, with businesses expecting revenue increases.
That said, the recovery has started from a very low basis, as in
2014 construction volumes were still more than 20% lower than
in 2008. The number of finished residential buildings decreased
by about 60% between 2009 and 2014. At the same time, the
recovery in the Dutch construction market remains one-sided,
driven mainly by growth in the residential construction segment,
while the non-residential subsector, especially the infrastructure
and utility construction segments, still face modest demand.
Residential construction output is expected to have grown 6% in
2015, and a growth rate of more than 3% is forecast in 2016. In
the coming years the demand for newly built homes is expected
to be structurally higher than during the crisis.
The infrastructure segment has also partly benefited from im-
proving market conditions, but strongly depends on the govern-
ment as its main client and could be therefore negatively affected
by any measures to trim the public budget. Competition between
businesses in the infrastructure construction segment remains
very fierce. At the same time, the utility construction sector still
suffers from an imbalance between supply and demand.
Many businesses active in this segment still show decreasing rev-
enues with strong pressure on their margins. A positive excep-
tion is the increase in newly built logistics centres and an increase
in the number of renovation and transformation projects.
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SNAPSHOTS
The Dutch construction sector is expected to show an average
growth rate of about 2% in the coming years, given that econom-
ic growth remains robust.
Due to the construction recovery, a decrease in non-payment no-
tifications and credit insurance claims was recorded in 2015, and
it is expected that non-payments and insolvencies will further
decrease in H1 of 2016. However, the on-going strong competi-
tion in the market indicates that many Dutch construction busi-
nesses remain affected by price wars, leading to on-going pres-
sure on margins. In the past years of downturn, the liquidity of
many companies has weakened due to losses and impairments,
straining both solvency and liquidity. At the same time, loan pol-
icies of banks towards construction companies continue to re-
main rather restrictive for the time being. As a result, businesses´
focus is still on cash flow and working capital - and on tighter
credit management. Despite the fact that many Dutch construc-
tion businesses went bankrupt in the last couple of years, there
is still overcapacity in the market, and a consolidation has yet to
take place.
While having slightly increased our risk appetite for Dutch con-
struction businesses in 2015, we still maintain a cautious under-
writing stance due to the still difficult market conditions. This
approach is underlined by the fact that major insolvencies are
still an issue despite the overall decreasing trend, such as the
recent bankruptcy of the large technical service provider Royal
Imtech N.V.
When assessing a buyer’s creditworthiness, we require up-to-
date financial information, and details of the 2015 order book
and payment experience. Additionally, we seek details on a com-
pany’s financing (covenants/securities) and the maturity dates of
bank loans. Our aim is still to maximise the insurance cover we
can give our customers, and in this respect third party securities,
if available, can help.
Dutch construction sector
Strengths
Economic rebound underway
Flexible work force (cost structure)
Demographic development
Weaknesses
Overcapacity and pressure on margins
Restrictive bank lending
Non-residential segment still faces
difficulties
Source: Atradius
The Netherlands: construction sector
2014 2015f 2016f
GDP growth (%) 1.0 2.1 1.7
Sector value added
growth (%) 3.6 4.3 2.6
Sector share in the national economy (%) 4.5
Average sector growth over the past
3 years (%) -2.9
Average sector growth over the past
5 years (%) -2.9
Degree of export orientation
very
low
Degree of competition
very
high
Sources: IHS, Atradius
13. 13
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TABLEOFCONTENSFULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
United States
77 The robust performance is expected to continue in 2016
77 Payments take between 30-60 days on average
77 Still many foreclosures in some states
Overview
Credit risk assessment
significantly
improving improving stable deteriorating
significantly
deteriorating
Trend in non-payments over
the last 6 months
✔
Development of non-payments
over the coming 6 months
✔
Trend in insolvencies over
the last 6 months
✔
Development of insolvencies over
the coming 6 months
✔
Financing conditions very high high average low very low
Dependence on bank finance ✔
Overall indebtedness of the sector ✔
Willingness of banks to provide
credit to this sector
✔
Business conditions
significantly
improving improving stable deteriorating
significantly
deteriorating
Profit margins: general trend
over the last 12 months
✔
General demand situation (sales) ✔
Source: Atradius
In 2015 the US construction sector continued its rebound that
started in 2012, with increases in both employment and report-
ed billings, and there is a sense of optimism among construction
industry executives that growth will continue for the foreseeable
future. The Wells Fargo Equipment Finance´s Construction Opti-
mism Quotient among US contractors and equipment distribu-
tors reached new highs in three of the last fouryears, culminating
in a record high for 2015.
Residential construction is estimated to have grown 8% in 2015
and is expected to remain robust through 2019. Foreclosures
have decreased 19% over the past 12 months, with foreclosure
filings in August 2015 on just 1 in 1,205 houses. Non-residen-
tial construction had its second best year since 2002, with re-
ported spending increased by more than 8% year-on-year. The
US construction equipment market saw improvements in 2014
and 2015, and expectations remain strong for equipment rent-
al. Construction industry unemployment rates further declined,
narrowing the gap between it and the national unemployment
rate. According to the US Bureau of Labor Statistics, the unem-
ployment rate in the construction sector declined from 8.3% in
December 2014 to 7.3% in December 2015. Unemployment rates
in the construction industry are at the lowest levels since 2007.
In 2016 construction production is expected to grow further,
as US economic growth is forecast to increase 2.9%, driven by
robust private consumption expansion and rising investment.
Construction output is expected to grow around 5% in 2016
and 2017 respectively. Accelerating job growth and decreasing
unemployment, increasing new-home construction, and lower
construction input prices have all increased the likelihood of con-
struction projects advancing. Banks are principally willing to lend
to the construction industry, but only for viable and promising
projects. As the commercial and residential development mar-
kets strengthen, the construction sector´s financing climate is
improving.
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Payments in the US construction industry still take 30-60 days
on average, while 90 day terms are not uncommon. The overall
number and the value of late payment notifications we received
in 2015 has decreased, as did insolvencies. Given the positive
growth prospects for the industry, we expect notifications of late
payments to decrease further in H1 of 2016. In line with the over-
all trend in the US, construction insolvencies are also expected
to decline further, but at a slower pace than in 2015. Small busi-
nesses in the industry are generally still paying later and have
higher bankruptcy rates and delinquent debt than other indus-
tries. At the same time increasing salaries, healthcare costs for
staff and miscellaneous expenses continue to affect margins.
While foreclosure rates have decreased in general, states such as
Maryland, Florida, New Jersey, and Nevada still record high de-
linquency rates. At the same time, building segments dependent
on the energy sector continue to suffer from sharply decreased
investments.
Due to the positive development, we have steadily increased our
risk appetite for the industry over the past few years. But given
the problems mentioned above caution is still advised, especially
with smaller construction businesses. When available, financial
statements are to be reviewed annually with supplemental soft
credit information reviewed more frequently. Trading experience
will be used to gain a better comfort level in gauging the rela-
tionship between our customers and their buyers. Reduction or
withdrawal of cover is considered if the buyer shows significant-
ly worsening results, including losses, heavy debt levels, prob-
lems with working capital, cash flow or liquidity or deteriorating
payment trends. We look for signs of progressive and profitable
operations, positive working capital and cash flow, and satisfac-
tory debt to net worth leverage. We also take into account less
measureable aspects such as goodwill, health/pension liabilities,
and litigation issues.
US construction sector
Strengths
Construction input prices, especially
in non-residential construction, have
decreased
Construction benefits from
accelerating job growth and decreasing
unemployment
Builders are expected to increase the
pace of new-home construction in 2016
Weaknesses
Downward pressure on revenues has
continued
Many prospective workers lack the
necessary skills to fill various openings
creating skill mismatches
Rising home prices and tight lending
standards create a prohibitive
environment for first-time home buyers
Source: Atradius
United States: construction sector
2014 2015f 2016f
GDP growth (%) 2.4 2.4 2.9
Sector value added
growth (%) 0.7 3.0 8.0
Sector share in the national economy (%) 3.3
Average sector growth over the past
3 years (%) 1.7
Average sector growth over the past
5 years (%) 0.1
Degree of export orientation average
Degree of competition high
Sources: IHS, Atradius
15. 15
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SNAPSHOTS
Market performance snapshots
Belgium
77 Growth expected to remain subdued in 2016
77 Low public construction investment
77 Level of payment delays and insolvencies remains high
The rebound of the Belgian construction sector remains slow, as
the industry is still underperforming compared to the rest of the
economy. Since the end of 2011, 20,000 construction jobs have
been lost, down to about 200,000 by the end of 2015. Belgian
construction businesses suffer from high labour costs, especially
when compared to construction businesses from Eastern Europe
active in Belgium. Public initiatives to restrict unfair competition
from foreign businesses and to reduce domestic labour costs in
order to increase competiveness had no real success so far. Con-
struction output is expected to grow by just about 1% in 2016,
and pressure remains on businesses´ profit margins.
Perspectives in the new residential construction segment remain
subdued, with the number of permits for residential buildings re-
cording a year-on-year decline in 2015. However, 2014 had been
an exceptionally positive year, with the number of building per-
mits up in the first half of 2014 as many households had filed
requests before the end of 2013 in order to avoid stricter energy
regulations. Most construction companies in this segment expect
a decrease in the construction and completion of new buildings
in 2016. Prospects for renovation businesses are more positive,
with orders showing an increasing trend due to the aged real es-
tate stock in Belgium.
In the non-residential construction sector, we have noticed a
year-on-year decrease in the number of permits in 2015. Gov-
ernment investment remains low (1.7% of GDP) compared to the
European average (3% of GDP). Infrastructure building is still
facing decreasing order books and prices. The public tendering
business seems to be most affected in Wallonia.
Payment terms of “60 days end of month” remain very common
in the sector. However, some construction contractors (main-
ly large businesses) are trying to solve their liquidity issues by
extending their payment terms even longer when paying their
subcontractors. Payment behaviour of public bodies remains
bad, and it is still quite common that businesses ask suppliers for
longer payment terms if they themselves are waiting for overdue
payments from public bodies.
Overall, we observed an increase in payment delays in 2015. Giv-
en the difficult market conditions, the number and amount of
notifications of non-payments is expected to remain high.
In 2015, 1,868 construction companies went insolvent: an 8%
year-on-year decrease. Construction accounted for 18% of all
Belgian business insolvencies. We expect business failures to
decrease further in 2016, although at a slower pace. Despite the
decreases, the overall level of construction insolvencies remains
high, given the steady increases seen in the years 2008-2013.
We noticed that construction businesses increasingly apply for
protection against suppliers according to the Wet Continuïteit
Ondernemingen (WCO) regulation, the Belgian equivalent of the
Chapter 11 procedure under US law.
That said, our prudent underwriting stance should allow us to
maintain our current level of engagement. In order to sustain our
risk appetite, it is necessary to identify the most affected com-
panies/subsectors and to contact buyers for up-to-date financial
information and performance outlooks. We have conducted re-
view actions in particular for subsectors (infrastructure works
and metal manufacturing/metal construction) due to rising cred-
it insurance claims.
16. 16
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ATAGLANCE
TABLEOFCONTENSFULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
Spain
77 Finally a rebound is underway
77 Still very long payment terms
77 Current political uncertainty has a dampening effect
The Spanish construction sector´s contraction bottomed out
in 2015, with a 0.3% contribution to GDP growth. In 2016 a ro-
bust output growth of about 4% is expected, followed by 5.5% in
2017. This upswing is due to Spain´s economic recovery, more
foreign investments and a return of business confidence. Lower
commodity prices have also had a positive impact on the current
rebound. However, it must be said that the current construction
recovery comes from a very low level following years of severe
recession.
Residential construction is expected to grow by more than 4%
in 2016 and 2017 due to increasing demand in big cities such
as Madrid and Barcelona, where the economic recovery is well
ahead of the rest of the country. However, a volatile job market
could weigh on demand.
After contracting in 2015, commercial construction is expect-
ed to grow 2.5% in 2016. The key to a real improvement in this
segment will be the recovery of enough demand from the com-
mercial sector (shops and offices) to justify the launch of new
projects.
Public construction has experienced a revival in 2015 as a result
of the general elections in December, with growth estimated at
6%. However, a continuation of the current political uncertainty
with a hung parliament could affect investments. At the same
time, there is still a great deal of uncertainty about any new gov-
ernment´s infrastructure development plans for the future.
Competition in the industry has ceased, as a large number of
players have left the market since 2008. In 2015 construction
businesses’ profit margins improved slightly, and this positive
trend is expected to continue. Spanish residential, non-residen-
tial construction and civil engineering are highly dependent on
bank funding. In this respect, conditions for external financing
have improved in 2015 due to lower country risk and better
growth prospects for the Spanish economy.
Payments still take more than 100 days on average, as con-
struction has always shown longer payment periods compared
to other sectors. However, in the last two years we have seen
a slight reduction in payment duration, and no increase in pay-
ment delays was recorded in 2015.
Construction insolvencies continued to decrease by 25% in Jan-
uary-September 2015. Due to lower leverage of businesses and
the positive growth outlook we expect business failures to de-
crease further in 2016, by about 10%-15%.
Due to the rebound, our underwriting stance for the construction
sector has become less restrictive than in previous years. Howev-
er, we are still prudent as the market has not yet fully consolidat-
ed and lending conditions have not yet fully eased. Due to the still
high indebtedness of many businesses active in residential and
commercial construction, we are still cautious with those sub-
sectors, and the same accounts for real-estate developers. Public
construction could be negatively affected by lower government
investment in case of on-going political uncertainty.
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United Kingdom
77 Many insolvencies in 2015
77 Still very long payment terms
77 Solar sector-related segment under threat
The UK construction sector accounts for more than 6% of British
GDP, and employed 2.1 million people in 2015. The industry suf-
fered heavily after the 2008 credit crisis, but rebounded in 2013
and 2014. However, this recovery lost some steam in 2015, with
construction output decreasing 2.2% in Q3 of 2015, and activity
increasing again towards the end of the year. Skill shortages of-
ten lead to the postponement of construction projects.
Despite the overall rebound in output, construction is still affect-
ed by trailing effects of the past recession. This became evident
in H1 of 2015, when construction insolvencies increased steep-
ly. Some larger business failures had a knock-on effect causing
their suppliers and subcontractors to go bust due to large sums
of monies owed.
The on-going problems are particularly noticeable in the tender-
ing process, as during the downturn, construction companies
took on contracts at conditions that were no longer sustainable
in 2014 and 2015, mainly due to raw material price increases
and higher labour costs. As many construction businesses are
still working on such low margin legacy contracts, losses on con-
tracts are still relatively frequent despite improving forward or-
der books. Late payments remained a major issue in the industry,
especially from Tier 1 contractors, who have issues with legacy
contracts themselves. Non-payment notifications showed an in-
creasing trend in 2015, and are expected to remain high in 2016.
At the same time, access to bank finance remains difficult for
many smaller businesses or businesses subject to unattractive
terms. This lack of funding affects SMEs that may need to re-
sume investment, particularly in capital expenditure to cope with
a growing market.
Due to the upward trend in construction output since 2013/2014,
builders are now able to be more selective in choosing which con-
tracts to tender, and therefore have more influence on payment
terms. However, this is somehow counteracted by increased la-
bour and material costs, which have a negative effect on busi-
nesses’ margins. Construction insolvencies are expected to level
off in 2016 after the increasing trend in 2015.
After increasing our risk appetite in 2014, we have turned to
be more restrictive again in our underwriting stance since ear-
ly 2015, when construction business failures started to increase
again. We will maintain a cautious stance on the industry in the
coming months, with risks considered on a case-by-case basis.
The speed of deterioration seen with of some of the recently
failed construction businesses highlights the need to receive
the most updated management accounts from buyers. Regular
provision of management accounts enables us to make a more
informed decision on credit limit applications and ensures that
decisions are as current as possible.
We are currently especially cautious with construction business-
es highly dependent on the UK solar sector, which is threatened
by a major downturn after the government decided to cut the
Feed-In Tariff by more than 80%. Insolvencies have already in-
creased in this segment since the end of 2015.
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Market performance at a glance
Australia
77 Construction performance in Australia remains subued,
mainly due the massive decrease in mining-related heavy
industrial, rail and port infrastructure construction activities
after the end of the commodity boom.
77 Business construction has contracted in 2015, but an upturn
is expected in the medium-term, driven by higher invest-
ment and increased economic growth. Residential building
spending is expected to increase further in 2016, fuelled by
low interest rates, pent-up domestic demand and foreign in-
vestment.
77 Payments in the construction sector take between 90-120
days on average. Notifications of non-payments have in-
creased and the current level is high.
77 Construction insolvencies are expected to level off in 2016,
but the overall level remains high. Debt levels have increased
and margins have decreased, especially for smaller business-
es with little ability to differentiate themselves, and which
therefore rely on price competition in order to acquire orders.
77 Our underwriting approach remains cautious, especially for
small businesses and the mining-related segment.
77 Besides focusing on the type of construction subsector it is
also important to take into account regional differences, e.g.
while engineering construction in Queensland and Western
Australia remains subdued, it is expected that in New South
Wales it will benefit from infrastructure investments (roads,
telecommuncations).
India
77 The Indian construction sector has been facing challenging
times in recent years due to slow reforms, weak investment
cycles, subdued business confidence, and delays in land ac-
quisition/clearance processes.
77 The outlook for 2016 has improved due to a better business
environment and large infrastructure projects launched by
the new government.
77 On-the-ground, recovery is expected to be a gradual process
as the sector still deals with structural constraints.
77 Construction companies remain highly leveraged, and ob-
taining financial support for projects remains a challenge.
However, banks have increased loans to the sector.
77 Payments in the construction sector take between 90-120
days on average.
77 We continue to maintain a cautious approach in underwriting
this sector.
77 Besides financial information, we assess trading experience
with buyers and monitor any changes in payment behaviour.
We also assess the strength of the customer-buyer relation-
ship.
77 We would generally not encourage customers to lengthen
their normal terms of payment.
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Japan
77 The short-term outlook for the Japanese construction sector
remains positive, as the industry will benefit from increasing
demand, triggered by a rebound in residential construction
and projects related to the 2020 Tokyo Olympics. There are
also some other major long-term projects such as the Maglev
railway, upgrades to highway networks, and a new rail link to
Haneda Airport in Tokyo.
77 Profit margins of businesses have improved, as labour costs
have not risen so far and material costs have remained sta-
ble. It is expected that the margins improve further in 2016.
77 The general willingness of banks to lend to this sector means
that there is additional financing easily available for compa-
nies that are not heavily indebted.
77 Payment duration in the industry is 90-120 days on average.
Payment experience has been good over the past two years.
77 Construction insolvencies remained stable year-on-year in
2015 and are expected not to increase in 2016 due to in-
creased building demand and the stabilisation of input prices.
77 Our underwriting stance on construction is generally open.
However, smaller businesses with weak financials could face
some difficulties in 2016 due to the overwhelming domi-
nance of four major construction firms and the potential in-
crease in low-priced tenders.
77 More caution is advised for construction materials exporters
dependent on the Chinese market.
77 A planned consumption tax hike to 10% in April 2017 could
derail the positive outlook earlier than expected. Smaller
players would also be less able to cope with a potential rise in
labour costs due to a lack of workforce.
Mexico
77 Mexican construction output grew 3% in 2015, with both res-
idential and non-residential construction recording increas-
es. Growth was mainly driven by private investment. Housing
construction has rebounded due to the low interest rates on
mortgage loans, increased funding for housing companies
and increased subsidies.
77 In 2016, construction output is expected to grow at the same
rate as in 2015. The energy sector reform and a national in-
frastructure plan should boost the construction of pipelines,
power plants and airports. The 500 most important projects
planned for 2016 would amount to Mexican pesos 446 billion
(EUR 24 billion).
77 However, a further decline in oil prices, slower US growth,
uncertainty about interest rates and currency volatility could
derail the performance of the sector in 2016.
77 On average, payments in the construction industry take 45-
120 days. It is common for buyers in this sector to pay slowly,
especially in the public infrastructure segment. In 2015 pay-
ment delays by public bodies and state-owned enterprises
increased.
77 Considering the potential impact of the still uncertain domes-
tic and international environment on the construction indus-
try, we maintain our 2016 performance outlook of ‘poor’ for
the time being.
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Turkey
77 Turkish construction growth slowed to 1% in 2015, as invest-
ments and purchasing activities were negatively affected by
political uncertainty around the two general elections held in
June and November 2015. Another negative factor was the
sharp depreciation of the Turkish lira.
77 In 2016 the sector is forecast to grow 2.5%, as the risk situa-
tion in public construction has eased somewhat, while resi-
dential construction still struggles with overhead supply.
77 Profit margins have deteriorated in 2015 due to increasing
labour and raw material costs and exchange rate volatility.
Additionally, with too many players in the market, a serious
supply-demand imbalance was observed in 2015, causing
severe price wars.
77 Bank loans to construction businesses have sharply in-
creased since 2010, and account for more than 10% of total
bank loans. Due to the high indebtedness in the construction
sector, businesses have to provide significant collateral when
lending.
77 Payment duration in the industry is 120-180 days on aver-
age. Payment experience has been bad over the past year,
and non-payment notifications and insolvencies increased in
2015 due to the high indebtedness of businesses. Non-per-
forming loans in the construction sector amounted to EUR
1.3 billion in November 2015 (3.% of all loans in this sector).
77 It is expected that non-payments and insolvencies will level
off in 2016.
77 Our underwriting stance on construction companies remains
restrictive, with the exception of businesses related to strong
groups and companies without liquidity problems.
77 Caution is also advised for companies doing business in Rus-
sia and Iraq.
77 In the medium- and long-term, the sector should benefit
from population growth and urban development.
United Arab Emirates
77 The sharp decrease in oil prices has a negative impact on
construction activities in the UAE. The government as the
largest sponsor of construction (especially infrastructure) is
facing a deterioration of its fiscal position due to decreasing
oil revenues. Commercial and residential construction are
facing headwind due to reduced demand and a cooling down
of the real estate market.
77 Decreasing demand, payment delays and strong competition
have led to an erosion of businesses´ profitability - both in
terms of reduced margins as well as increased provisions to-
wards bad debts.
77 Construction businesses are largely dependent on banks to
fund their working capital requirements. However, banks
have become very restrictive on lending due to the low de-
mand situation and the fact that many construction busi-
nesses are already highly geared.
77 Payments in the construction sector now take between 90-
180 days on average (after 90-120 days in early 2015). Due
to the current liquidity squeeze, many players are delaying
payments. This has a knock-on effect on the trade cycle, with
many smaller players struggling to meet their payment com-
mitments. Non-payments are expected to increase by more
than 30% in the coming six months, and business closures
are also on the rise.
77 Due to the current challenging business environment, we
have decreased our risk appetite in all construction subsec-
tors. We are especially cautious on large buyers with sizeable
exposure to government projects, buyers operating in the
infrastructure segment, and businesses operating in oil field
support services.
24. 24
MARKETPERFORMANCE
ATAGLANCE
TABLEOFCONTENSFULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
Industry performance
Changes since December 2015
Europe
Denmark
Construction/Construction Materials
Up From Poor to Fair
Both residential and non-residential construction have rebound-
ed in 2015, and insolvencies have decreased. We have increased
our risk appetite for this industry.
Germany
Agriculture
Down from Good to Fair
Sales have sharply decreased in the dairy and meat segments,
while prices for cereals and animal feed declined. The sector is
affected by the on-going Russian import ban and decreasing de-
mand from China.
Portugal
Food
Up from Fair to Good
The industry has shown a robust performance in 2015, and the
number of businesses active in the food sector has increased.
Services
Up from Fair to Good
The tourism segment has grown in the past few years, and is
expected to continue growing in 2016. An easing of the auster-
ity policy would probably help to increase private consumption,
which would benefit the services sector.
Spain
Automotive
Up from Fair to Good
Car production is expected to increase in 2016 and 2017, with ro-
bust investments made by major carmakers and rising exports.
At the same time domestic demand is expected to increase 10%
in 2016, due to the economic rebound and low oil prices.
Switzerland
Construction
Down from Good to Fair
Higher risk of increasing business insolvencies in this sector in
2016.
25. 25
MARKETPERFORMANCE
ATAGLANCE
TABLEOFCONTENSFULLREPORTSINDUSTRYPERFORMANCEOVERVIEWCHARTMARKETPERFORMANCE
SNAPSHOTS
Asia/Oceania
Indonesia
Agriculture
Down from Good to Fair
Non-payments in this industry have increased to a high level.
Singapore
Construction/Construction materials
Down from Fair to Poor
Machines/Engineering
Down from Good to Fair
Both sectors are affected by lower economic growth in Singa-
pore and in the region, as well as by decreased investments.
Private construction activity is expected to slow down in 2016
due to an increased supply of already completed private housing
projects and offices.
United Arab Emirates
Agriculture
Down from Excellent to Good
Paper
Down from Good to Fair
Both sectors are negatively affected by the current economic
downturn.
Chemicals
Down from Good to Fair
Low oil prices have an immediate negative impact on chemicals,
especially the petrochemicals segment.
Construction
Down from Fair to Poor
Consumer durables
Down from Fair to Poor
Electronics/ICT
Down from Fair to Poor
The 2016 performance outlook for the construction, consumer
durables and electronics/ICT industries is subdued, and credit
insurance claims have sharply increased.
Food
Down from Good to Poor
Non-payments have sharply increased and the number of insol-
vencies is high.
Metals
Down from Fair to Poor
Steel
Down from Fair to Poor
Both sectors are negatively affected by the deterioration in the
construction sector.
Textiles
Down from Fair to Poor
There have been several insolvency cases in the industry, and the
2016 performance outlook is subdued.
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