Publications

In Central Europe, Poland's economy looks most vulnerable to the financial and economic fallout of the United Kingdom's decision to leave the EU.

Romania´s GDP is expected to grow at a lower pace in 2018 and 2019 as export growth has slowed and domestic demand is cooling due to higher interest rates.

Despite the current rebound the long-term prospect for higher growth rates is subdued due to structural weaknesses and the negative impact of sanctions.

Despite monetary tightening the economy remains susceptible to further currency volatility, and the risk of a severe economic downturn has increased.

Despite a minor decrease in overdue B2B invoices, 45.0% of businesses in Eastern Europe reported having to manage the negative impact of payment delays.

Of the Eastern European countries surveyed, Bulgaria had the highest DSO and 19.8% of respondents expect another slight increase over the coming 12 months.

The percentage of Czech respondents reporting late payment remained largely stable. However, at 89.8% this is one of the highest percentages in the region.

In 2018, respondents in Hungary reported a significant increase in DSO and that the proportion of uncollectable B2B receivables also went up slightly.

Due to overdue B2B invoices, 20.3% of respondents in Romania had to postpone payments to their own suppliers while 14.8% had to correct cash flow.

The proportion of past due B2B invoices is the second highest in the region and almost 60% of Polish respondents said that this affected their businesses.

Despite improvements in 2018, respondents in Slovakia reported an increase in DSO and 27.5% of businesses seem to have been impacted by late payments.

2018 brought many changes in Turkey – more frequent payment delays, increases in the proportion of overdue B2B invoices and DSO, a longer payment duration.

It seems that the market is rather resilient in the light of the ongoing Sino-US trade dispute, but overcapacity in the electric car segment is increasing.

Any imposition of tariffs on car parts and vehicle imports would severely impact the US automotive industry, most probably leading to more insolvencies.

Both payment delays and insolvencies are expected to increase in the coming months as decreasing investments and lower production will impact suppliers.

Despite the ongoing upturn, automotive suppliers at the lower end of the value chain face elevated debt levels, strong competition and price pressure.

Margins continue to decrease due to increased material and labour costs, rising competition, pressure on sales prices and the need to invest heavily.

The sector shows good growth rates, but manufacturers active in the US are affected by the import tariffs on steel and aluminium imposed since June 2017.

Smaller automotive businesses experienced a decrease in equity, solvency and liquidity ratios - a trend that is expected continue in the coming months.

The impact of potential US tariffs on car and car-part producers would be limited, as the US is not a key market for Spanish OEMs due to their model range.