How has the consumer durables sector performed in the last six months?
Although household consumption is gradually rebounding from contraction to modest growth, this sector is still under extreme pressure. According to Statistics Netherlands, spending on durable consumer goods rose only 1% year-on-year in May. Despite the major sports events of 2010 that have helped to boost sales of flat screen televisions, the sector continues to suffer from the low demand that has persisted for the past two years. While consumers are spending more, the non-food sector has contracted 3.3% in the period January to May, with retail electronics and white goods decreasing by as much as 3.8%.
What is the current trend in payment delays, payment defaults and insolvencies?
Many companies in this sector have made a loss throughout 2009 and so far in 2010, with smaller companies feeling the impact of fierce competition the worst. So Crédito y Caución is seeing a large number of defaults on payment and insolvencies.
What should companies selling to buyers in this sector pay particular attention to?
Any request for an extension of terms of payment should set the alarm bells ringing, as this may be a sign of potential non-payment in the near future.
What is Crédito y Caucións short term outlook for the consumer durables sector?
Considering the current uncertainties over the governments measures to reduce the budget deficit, consumers are unlikely to increase their spending in the short term. Apart from continued contraction, Crédito y Caución also expects a shake out of companies, with the bigger retail chains increasing their market share.
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