Business-risk level falls as payment ethic stabilizes

The risk level of companies whose businessactivities are under threat dropped moderately in July as paymentreliability stabilized, Business Data Israel reported Wednesday.
"Overthe last three months we are seeing an improvement in the averageweighted risk level of businesses in the economy, although the averagerisk level is still high compared with the same months last year," BDIsaid. "The trend points to a slowdown of the impact of the globalfinancial crisis on Israeli businesses."
The average weighted risk level in the economy improved moderately in July to 6.19, down from 6.30 in June.
BDI said the risk level was still high compared to last July's risk level of 5.81.
BDIsaid 21.9 percent of the companies it analyzed in July were highlyrisky and dangerous, with an average weighted risk level of 9 and 10,down from 23.4% in June.
BDI said these businesses were suffering from great liquidityproblems, reports of bouncing checks and big losses in revenues andprofits. These difficulties were threatening their business activityfor the coming year or two, BDI said.
The tourism and hotel sector had the highest riskrating in July, at 7.31. It was followed by the restaurant and cafesector, at 7.21, down from 7.30 in June; the haulage services sector,at 7.19; and the construction sector, at 6.93.
The strongest sector in July was chemicals, at 5.42. It wasfollowed by the paper and carton sector, at 5.65; and cosmetics andpharmaceuticals, at 5.67, down from 6.24 in June.
BDI's payment reliability report showed that the average numberof "late payment" or credit days remained stable in July, at 12 days;reliability worsened by two days in June.
However, the average credit period agreed to by businesses and suppliers deteriorated slightly to 92 days, up from 91 in June.
"The stability of late payment days is an indicator of a moderate relaxation of the liquidity crunch," the BDI report said.
The ceramics and sanitary tools sector had the most lax paymentnorms in July, an average of 24 days beyond agreed deadlines. It wasfollowed by the food, catering and beverage sector, at 23 days late;and newspapers and printing houses, at 20 days late.
The most reliable deals were made in the chemicals and drugssector, where payment was on average four days late. It was followed bythe paper and carton sector and the telecommunications and Internetsector, at seven days late.