Late payment and circular debt in Hungarian business life
This analysis by IEER concerns the experience of Hungarian businesses with late payment and circular debt. The results are based on IEER's July 2018 Quarterly Business Climate Survey, which involved 400 domestic respondents. Based on the answers, 55% of businesses had at least one partner that paid late in the first half of 2018, and 8% of respondents made late payments themselves to their suppliers in the examined period. The issue of late payment most often hits medium-sized companies (with 100-249 employees) and the construction industry. The results show that businesses now have fewer late-paying partners on average than in the previous few years, and a smaller proportion of their income arrives late. However, the number of companies that failed to pay in time to their suppliers at least once due to the late payment of their customers slightly rose since January 2018.
In the course of IEER's July 2018 Quarterly Business Climate Survey, 400 domestic respondents were surveyed about late payment and circular debt.
55% of surveyed companies had at least one business partner that paid late multiple times in the first half of 2018. As seen in Figure 1, the rate of the same companies was 63% in the second half of 2017 and 78% in January the same year, meaning that late payment has become rarer compared to the results of our previous survey. The proportion of companies with more than half of their partners paying late also decreased. In July 2018, 2% of companies were such, whereas the same ratio was 3% and 7% in January 2018, and January 2017, respectively.
The companies affected the most in the first half of 2018 were medium sized companies employing 100-249 workers. 63% of these companies received late payment from at least one partner (in fact, 13% of their partners paid late on average). By analysing data by sectors one can say that construction companies (67%) and providers of business services (57%) were the most often exposed to late payment. Respectively, 16% and 12% of the partners of construction companies and business service providers paid late multiple times. Besides, results also show that ownership structure did not really make a difference in the proportion of late-paying business partners: 55% of fully domestic companies had such partners in 2018 (on average, 9% of their partners paid late), while 51% of companies of (partly) foreign ownership received delayed payment (on average, from 8% of their business partners)...
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 MBET February 2019 |