- Average payment terms rose slightly to 65 days in 2024 from 64 in 2023
- The average payment delay was unchanged at 65 days in 2024 but the share of companies experiencing payment delays dropped to 49%.
- The share of companies reporting ultra-long payment delays (ULPDs[1]) exceeding 2% of annual turnover rose to a new high at 40%, up from 23% in 2023. Wood, Agro-food and Automotive reported the highest increase.
- 57% of companies expect payment behaviours to worsen in the next six months, citing slowing demand, competitive pressure, and rising costs as top risks.
- 33% of companies expected business outlook to deteriorate in 2025.
“Asia-Pacific experienced a slowdown in growth in 2024 due to slow growth in global demand, rising costs and high interest environment. The record surge in ULPDs signals that companies expect to face mounting financial strain. Along with escalating tariffs, businesses are bracing for a more volatile trade and policy environment. We have revised the GDP growth forecast for Asia to 3.8% in 2025. “ said Bernard Aw, Chief Economist for Asia-Pacific at Coface.
Credit terms still tight and may tighten ahead
Credit conditions remained tighter in 2024 compared to before 2023. Payment terms rose from 64 days in 2023 to 65 but below the five-year average of 69 days in 2018-2022.
Ten of the 13 sectors surveyed saw their payment terms increase in 2024. The sharpest rise was recorded in the automotive sector followed by textiles and chemicals. Increasing competition in the auto market prompted dealers to be more flexible in granting credit and to use it as a competitive tool.
Looking ahead, two-thirds of companies expect shorter payment terms, reflecting caution and higher priority for cash preservation amid heightened uncertainty.
Rising concern as ultra-long payment delays hit record high
The average payment delay remained stable at 65 days, unchanged from 2023.
Transport and Automobile reported higher payment delays (respectively +2% and +1% vs 2023).
However, the share of companies reporting ULPDs – payment delays over 180 days and exceeding 2% of annual revenue – rose dramatically to a new high at 40%, up from 23% in 2023. This represent a very high risk, given that 80% of these delays have never been paid, according to Coface’s experience. Such delays were highest in China, India, Thailand and Malaysia. All 13 sectors also saw increased ULPDs, with the most notable increases in Wood (+37%), Agro-food (+20%) and Automotive (+18%).
This trend is expected to continue over the next six months as 57% of companies expected a deterioration in late payments.
Outlook: Shifting trade policies expected to impact economic sentiment
We expect the economic outlook for 2025 to continue to weaken. Higher tariffs and shifting trade policies have increased uncertainty over global economic policy, weighing heavily on business spending and consumer confidence. In addition, companies also cite over-competitive pressures, slowing demand and higher labour costs as additional risks.
33% of respondents expect business activity to deteriorate in 2025 (vs 2024), more than double as compared to last year’s survey. Taiwan and Singapore were the most pessimistic, where over 4 out of 10 respondents expect deteriorating business activity.
‘Asia-Pacific
growth
slowed
in
2024
as
demand
weakened.
The
rebound
in
trade
last
year
has
marginally
offset
the
decline
in
2023.
In
the
face
of
continued
and
heightened
geo-political
uncertainty
and
increasing
costs,
many
businesses
are
anticipated
to
strengthen
their
credit
management
measures
and
prioritise
cost
management.’
said
Bernard
Aw,
Chief
Economist
for
Asia-Pacific
at
Coface.
https://www.linkedin.com/company/coface
Hashtag: #Coface
The issuer is solely responsible for the content of this announcement.
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