Coface is observing a net deterioration in company payment behavior, with payment defaults increasing 45% over the first four months 2008 compared to the same period in 2007. This is a clear sign of the beginning of a credit crisis, even after taking into account that the indicator, based on statements from Coface insured clients in 65 countries, traditionally overreacts at the start of a crisis. For this reason, Coface confirms its January forecast of a crisis less significant overall than the crisis of 2001-2002, which was marked by a 30% increase in payment incidents.
The financial crisis has rippled through to the actual economy in two ways. First, American demand is reduced, mainly affecting North America and U.S.-oriented countries and sectors. Second is the increased difficulty in access to bank credit. Added to these factors are higher prices for raw materials and energy, the appreciation of currencies outside the dollar bloc and very stiff competition. For the moment, France and Germany are only slightly affected.
Coface lowers the rating of seven sectors
The affected sectors are air transport, public works, automotive, paper, mass distribution, electrical components and textiles. Ratings have been lowered on the worldwide level for some and only in the United States and/or Western Europe for others.
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