UK Economy giving positive signals as the new year dawns.

12th February 2020.

James Salmon, Operations Director.

UK services sector surged in January

A new survey has revealed that the UK services sector surged in January.

The news of a  surge in the UK’s dominant sector is just what Credit Managers would want to hear.

The IHS Markit/Cips index of services activity hit 53.9 in January, its best reading since September 2018. It was well above an earlier estimate of 52.9 and far higher than the 50 registered in December.

A score of above 50 indicates expansion, and January’s reading was the first time the sector had grown since August 2019.

Meanwhile, the pace of job creation reached its strongest since July 2019 last month, meaning services firms have taken on employees for three months in a row.

Construction industry showing signs of life

The construction industry isalso  seeing signs of improvement, following the Conservative Party’s decisive general election victory.

The monthly IHS Markit/ CIPS Purchasing Managers’ Index (PMI) for January recorded a score of 48.4 – anything below 50 is seen as a sector in decline – but this was a boost from December’s score of 44.4.

Tim Moore, economics associate director at IHS Markit, commented: “Measured overall, the latest dip in construction output was much shallower than in December, with survey respondents often commenting on improved willingness to spend among clients since the General Election.”

He added that the best-performing part of the construction industry was the housebuilding sector, with output only falling slightly.

Major contractors paying bills nine days quicker

Major contractors are paying their bills nine days quicker on average according to latest data released by Build UK.

But only a handful of construction firms have managed to get their average payment days down to or below the 30 day target.

Vinci and Mace are the fastest payers with an average settlement time of 26 days, then come Osborne and Willmott Dixon on 30 days.

At the other end of the table are Engie on 55 days, Muliplex on 49, Seddon on 48 and Galliford Try on 43.

To see the full interactive tables click here.

Build UK Deputy Chief Executive Jo Fautley said: “We have seen consistent improvement from our members since Build UK began benchmarking their payment performance in 2018.

“Contractor members in particular have taken the opportunity to change the industry’s approach to late payment, recognising the importance of transparency to drive good practice.

“There is still work to be done but these latest results show that we are definitely heading in the right direction.”

Productivity gap not closing

Figures, however  from the Office for National Statistics (ONS) have laid bare Britain’s regional productivity gap – with London 32% more productive than the UK average in 2018.

The data also showed that the south-east pulled further away from the north-east and Yorkshire in 2018 – the most recent year for regional data.

CPA has long argued that tackling late payments would be a key way to improve productivity across the regions as late payments tie up capital, distract business owners and slow growth.

Most small business owners would agree that having to spend a large percentage of the working week chasing late payments is not the most productive use of their time.

January sees surge in hiring

The number of people placed in permanent jobs in January rose at its quickest monthly rate in a year.

The latest monthly Report on Jobs from KPMG and the Recruitment & Employment Confederation (REC) shows workers in the north of England benefited the most while in London appointments fell.

Researchers said that their permanent placements index rose to 52.3 in January, from 51.9 the previous month and the highest level in 13 months. But temporary billings fell, with employers appearing anxious about upcoming IR35 tax legislation.

James Stewart, vice chairman at KPMG, said: “Following the UK exit of the EU, there are promising signs that the UK jobs market is finally on the up.”

New year boost for high street sales

January was the best month for high street sales since January 2014, according to BDO‘s latest sales tracker.

It shows that in-store like-for-like sales increased 5.7% in January compared with a year before as retail rallied following a challenging year.

Shoppers spend as post-election confidence returns

The value of retail sales rose 0.4% in January compared with the same month last year, according to the latest figures from the BRC and KPMG.

The data marked an improvement on the 0.1% contraction for 2019 as a whole. Paul Martin, UK head of retail at KPMG, said that “although static sales might not appear triumphant, at least it is no further deterioration. Consumer confidence has started to return, but we have not experienced any major leaps for the sector yet.”

Helen Dickinson, chief executive of the BRC, commented: “Recent political uncertainty and a decade of austerity appear to have ingrained a more thrifty approach to shopping among consumers. Furthermore, as sustainability continues to rise up the agenda, many customers are switching to more environmentally friendly products or simply choosing to buy less.”

ONS shows decline in Brits’ life satisfaction during Q3 2019

The third quarter of 2019 saw a 0.7 year-on-year decline in British people’s average satisfaction in regards to their personal and economic well-being for the first time since official records began in 2011, with people reporting that they became more pessimistic about their future job prospects.

If we think back to the uncertainty at the end of 2019, then this may not be a surprise.

The figures come from the Office for National Statistics (ONS), which said: “People who are employed and are more concerned about their job security report worse levels of well-being than those who are less concerned”. However, companies and households have also reported rising confidence since the December General Election.

House price growth fastest in two years

UK house prices are rising at their fastest annual rate for nearly two years, jumping 4.1% year-on-year in January, according to Halifax.

From December, prices rose 0.4%, and climbed 2.3% on a quarterly basis, Halifax’s house price index revealed.

Russell Galley, a managing director at Halifax, said there were several signs of a pick-up in the housing market, including more buyer and seller activity, consistent with a reduction in uncertainty in the UK economy.

Halifax said it expected a “moderate” rate of house price growth over the course of the year as demand was likely to continue to exceed the supply of properties for sale across the UK because of the “subdued” pace of new building

Economy flatlines in Q4 2019 but exports jumped

The UK economy ground to a halt in the last quarter of 2019, according to the latest data from the Office for National Statistics (ONS), as political uncertainty driven by Brexit and the December General Election weighed heavily on the nation.

Britain’s services sector rose just 0.1%, while manufacturing production fell 1.1% quarter on quarter, as the UK economy grew 1.4% in 2019 as a whole.

The uncertainty surrounding Britain’s future relationship with the EU is blamed for the weak GDP figures but analysts say post-election optimism should be maintained throughout 2020.

“The underlying picture for production was one of weakening throughout 2019, with nine months of the year showing negative rolling three-month growths,” the ONS said.

However, UK companies sold £689bn of goods and services overseas last year, up 5% on 2018, according to the ONS.

Goods exports to outside the EU rose 13.6% while sales into the bloc fell by 0.9%. China is now Britain’s third largest export market behind the US and Germany having leapfrogged France, the Netherlands and Ireland.

Coronavirus could cut global GDP to zero this quarter

Capital Economics estimates that the coronavirus could cost the world economy over $280bn in the first quarter of this year meaning zero growth in global GDP for the first time since 2009.

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.

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 your 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.

You might be hesitant about contacting a debt collection agency. What are they going to be like?

Can they help your particular type of business?

There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.

Debt collection agencies are not all alike.

Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and  has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!

At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.

The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.

We are polite, firm and efficient when it comes to recovering outstanding debt.

“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has  helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire

“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington

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


Ready to speak to an advisor?

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

Call us today

0330 053 9263

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.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

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

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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

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