Business risk level improves, but payment ethic worsens

Companies still struggled to pay bills as the average number of late credit days worsened by two days.

June 8, 2009 10:45
2 minute read.
shekels coins 88

shekels good 88. (photo credit: )


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later Don't show it again

Although the level of business improved slightly in May from a month earlier, companies still struggled to pay bills as the average number of late credit days worsened by two days, Business Data Israel reported on Sunday. In May, BDI's average-weighted business risk index moved down slightly, by 0.5 percent to 6.35 points, from 6.38 points in the previous month. "However, the business risk level among companies in the economy is still high on average and has risen by 8% in comparison with May last year, when the index stood at 5.87 points," BDI economists said. Out of the surveyed companies, 23.7% were classified as being at very high risk last month, with an average weighted risk level of 9 and 10, compared with 25% in April. BDI said these businesses suffered from large liquidity problems, bouncing checks, and big losses in revenues and profits. The difficulties faced by these companies and businesses would threaten the continuation of their business activity for the coming year or two, the economists said. As in previous months, the restaurant and café sector was rated the riskiest in May, with a business-risk rating of 7.10, a slight improvement from April. Construction was the second-riskiest sector, with a business risk rating of 7.01, up from 6.97. The tourism and hotel sector was third, with a rating of 6.93, an improvement from 7.01 in the preceding month. The business-risk level in the transportation industrial goods sector was 6.85 in May, up from 6.53. The chemicals sector was rated the strongest and most secure sector, with an average business risk rating of 5.36 in May, from 5.45 in the previous month, followed by the metal industry sector, at 5.40, from 5.63 previously, and the paper and carton sector, at 5.55. Year-on-year comparisons showed the biggest deterioration was in the rubber and plastics sector, with the rating falling 11.9%. The biggest improvement was found in the transportation services sector, which improved by 5.3% from a year ago. Meanwhile, BDI's payment ethic index showed that payment ethic across the majority of sectors in the economy worsened last month. The number of late payment days to suppliers rose by two days, to 10 days, compared with 8 days in April. The average credit period agreed to by businesses remained unchanged in May and stood at 91 days. The payment ethic in 79% of surveyed business sectors (23 out of 29 sectors) deteriorated last month compared with April, while in 10% of business sectors the payment ethic was unchanged. The food and beverage manufacturing and wholesale sector had the most lax payment norms in May; the average payment by food and beverage producers was 23 days beyond agreed deadlines, BDI said. The transport, storage and logistics sector came in second place, with 17 late payment days on average. The most reliable deals were made in the chemicals and drugs manufacturing and wholesale sector, where average payment was three days late beyond the agreed credit days during May, bringing the total to 94 days. The next best was the paper and carton manufacturing sector, with an average of three days of delayed debt payment, bringing the total of credit days to 106.

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection