Approximately 82,000 Kiwi firms downgraded
Approximately 82,000 New Zealand firms have had their credit risk or payment profile downgraded since January 2008, as they clearly saw the signs of stress in the recessionary economy.
It was confirmed by Credit reporting agency Dun & Bradstreet, which released the data today that this has come as the largest number of downgrades ever, over a 15 month period.
It was found by Dun & Bradstreet nearly 38,000 firms were rated as having a higher risk of financial distress in the coming 12 months since January last year and furthermore, 44,000 were most probably to pay trade accounts in a severely delinquent manner.
It was specified by Dun & Bradstreet's general manager John Scott that the economic downturn was likely to be prolonged and difficult for many businesses.
He added that the real economy was being affected by the economic crisis with the outlook for trade credit - the lifeblood of the economy - deteriorating severely, which was quite clear by the downgrades.
It was found by Dun & Bradstreet that the entire economy saw the occurrence of downgrades, though the highest number of risk and payment downgrades were held by younger companies, the services sector and North Island businesses.
The highest percentage of increased risk of failure downgrades was witnessed by the communication sector at 17.7 percent while the manufacturing sector suffered the highest risk of delinquent payment downgrades at 23 percent.
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