Manufacturing downturn deepens - CPA | The Credit Protection Association

Manufacturing downturn deepens.

1st July 2019.

The UK manufacturing PMI has fallen to its lowest level since February 2013 as the manufacturing downturn deepens.

The June IHS Markit/CIPS UK manufacturing purchasing managers’ index (PMI) showed a reading of 48, down from 49.4 in May.

“The UK manufacturing sector continued to feel the reverberations of the unwinding of earlier pre-Brexit stockpiling activity during June,” the report said.

Looking at the information, EY ITEM Club chief economic adviser Howard Archer noted that the PMI figures “point to a stagnating economy,” adding:

“My best guess is that GDP contracts by 0.1% to 0.2% in the second quarter.”

Bloomberg meanwhile has predicted no economic growth for the second quarter of 2019 in its forecast for June, down from a 0.5% growth forecast at the start of 2019.

Consumer confidence plummets

Reports of a poor economic outlook in the second quarter come as sectors across the UK have faced the impact of waning consumer confidence this year.

Figures published by the European Commission in March showed that UK consumer confidence was down to -12, marking the UK’s lowest reading since 2011 and a significantly worse score than other European countries such as Germany, where confidence was recorded at -2.

The GfK consumer index showed a worse-than-expected decline in June to -13, down from -10 in May, with analysts warning that the results could “point to a turbulent time for the economy over the summer months.”

The index, which is carried out on behalf of the European Commission and has been negative since around the time of the 2016 EU referendum, assessed 2,001 people between June 3^rd and June 14^th.

In the retail sector, sentiment plummeted last month, with a survey published by the European Commission last week indicating that sentiment amongst retailers dropped from +3 in May to -7.5 in June, representing the sector’s lowest score since 2013.

The retail sector has faced difficult trading conditions for much of 2018 and 2019, with growth also slowing significantly in the first quarter of 2019.

Output falls at fastest rate since 2012

Political uncertainty surrounding Brexit has been blamed for much of the harm to the UK’s economy, with new research from the Confederation of British Industry linking a steep decline in private sector output to the increasing possibility of a no-deal Brexit.

According to the CBI’s growth indicator, output across the UK economy fell at its fastest rate since 2012 in the second quarter of 2019.

Distribution volumes meanwhile plummeted, declining at the fastest pace in nearly 10 years (since August 2009).

CBI chief economist Rain Newton-Smith notes that whilst some factors “pushing down activity” are temporary – such as “companies adjusting their stocks following the Brexit extension, interruptions to car production and poor weather,” deeper and ongoing issues regarding the UK’s political uncertainty look set to continue impacting growth.

“The economy is being stifled by uncertainty about the UK’s relationship with the EU,” added Newton-Smith, noting that resultantly “underlying activity and confidence is clearly subdued.”

Diligent small businesses beat productivity gloom

The Sunday Times looks at the efforts small businesses are making to improve productivity ahead of figures due this week showing a 0.2% fall in productivity for the first three months of the year, the third consecutive quarter of decline.

The ONS estimates that 90% of the least productive companies employed fewer than 10 people and although some responsibility rests with founders, some experts say ineffectual government initiatives and a lack of advice on how to improve are also to blame.

Tony Danker of Be the Business, a productivity campaign backed by the Government, says it is the small business owners “with commitment, expertise and planning who are getting the yield.”

The Sunday Times, Business, Page: 9

Economic paralysis set to last all summer

The British Chambers of Commerce has warned that the UK economy is likely to remain “in stasis” until October as the lack of clarity over Brexit continues.

The business lobby group’s latest quarterly survey found the underlying economic conditions were “stagnant” in the three months to June.

Meanwhile, a survey by BDO has found that British export growth in the second quarter fell below the long-run trend but there was a sharper decline in France, Italy, Spain and Germany.

The weakness of EU exports was put down to “the hangover effects from pre-Brexit stockpiling

What does this all mean for credit management?

A deepening of the manufacturing downtown will leach into the broad economy as their suppliers and employees are affected. There will therefore be continued pressures on UK businesses. With a lack of growth companies will be looking at other ways to boost cash flow and that usually means paying their suppliers late.

There is a danger that the longer the paralysis lasts, the deeper and more structural it will become. In these tough economic conditions there is an increased risk of insolvencies so suppliers need to limit their exposure to those in danger. So watch the payment practices of any manufacturer customers.

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Yes, CPA can help you boost your business cash-flow.

Don’t let your bankers control you, contact CPA today.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

New warning over catastrophic effects of late payments

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Do you realise you could be sitting on a fortune?

Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.

If you sold B2B on credit then there may be a hidden source of capital you can call on.

If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.

Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.

We can help you uncover the pile of gold, you didn’t even know you were sitting on.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.

Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.

You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.

That compensation could provide the cash boost your business needed.

But don’t delay, that compensation evaporates if not claimed within six years of the late payment.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.

Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.

CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.

The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

Those former clients who regularly paid you late can finally be made to pay.

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

Do you sell on credit?

With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.

Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.

You can’t just assume your customers can and will pay you eventually, no matter how big their name is.

It is essential to have credit management systems in place to monitor and check your customers credit worthiness.

It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.

See the section below – About CPA.

About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply on credit, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.