Kiwis sixth-worst bill payers in Asia-Pacific

Wednesday 22nd April 2009

New Zealand companies were the sixth-worst in the Asia-Pacific region at promptly paying their bills as tighter credit conditions force businesses to hold onto their funds as long as possible, a survey shows.

New Zealand firms on average paid their bills in 48.4 days in the first quarter, an improvement from the seven-year high 50.8 days in the three months ended December 31, according to Dun & Bradstreet New Zealand’s quarterly trade payments analysis. The fastest payers were in South Korea, Taiwan, Japan, Vietnam, Hong Kong and China. Australian companies paid in an average 57.5 days, or 9.3 days later than nearest neighbor New Zealand.

“New Zealand companies slightly improved payment terms in the first quarter of 2009 however we believe this is largely due to seasonal factors,” said general manager John Scott. “Any actions that can be taken to reduce payment terms will assist New Zealand to avoid the extent of pain that other nations are experiencing.”

Falling interest rates have made credit more affordable in New Zealand as the central bank has moved to lift the country’s economy out of its first recession in a decade. Reserve Bank Governor Alan Bollard slashed the official cash rate by 525 basis points to a record-low 3% as policy makers around the world used monetary policy to address the credit crunch.

Companies including Sky City Entertainment and Fletcher Building Ltd. have strengthened their balance sheets through capital raising, taking advantage of demand while interest rates are at historically unattractive levels for investors.

Western Europe and Asia-Pacific have experienced the most prominent impact of deteriorating payment terms, with 17 countries in these regions of the 42 worldwide paying more than 30% of their bills at 30 days or more past the due date. Over 32% of local firms are taking more than 30 days to repay outstanding debts in the fourth quarter, higher than the 26% of firms in the Asia-Pacific region.

Businesswire.co.nz

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