KEY POINTS:
New Zealand exporters face payment delays as fallout from the US sub-prime mortgage market crisis hits our trading partners, according to research from Dun & Bradstreet.
The credit services company says businesses across Asia-Pacific - a vital export region for New Zealand - face a credit squeeze as
demand for products decreases with the US tightening its belt on spending.
That slow-down's ripple effect is beginning to hit New Zealand exporters who are finding payments from their overseas customers are increasingly arriving later than due.
Dun & Bradstreet data shows several countries in the region have businesses that are paying a significant percentage of their accounts late.
India has the worst record, with 55.9 per cent of payments made past the agreed deadline under standard terms of trade.
"The recent sub-prime fallout has heightened economic tension in the Asia-Pacific region and created a more unstable trading environment for New Zealand exporters," said Dun & Bradstreet New Zealand general manager John Scott.
"Even though the Asia-Pacific region's direct exposure to the US sub-prime loans was minimal, the subsequent jump in global risk aversion and the associated re-pricing of risk has the potential to impact Asian economies in a multitude of ways."
The situation was compounded for New Zealand exporters by the fact that three-quarters of them were involved in either manufacturing or wholesaling, two business sectors likely to be hardest hit by a regional slowdown.
New Zealand exporters also tended to be smaller businesses - 80 per cent sell less than $10 million worth of goods or services a year - and this made them more susceptible to cash-flow problems if payments were late.
"We see risk as greatest for the small-to-medium-sized exporters who don't have a dominant market position and are reliant on a small number of overseas customers," Scott said. John Walley, the chief executive of the Manufacturers and Exporters Association, described Dun & Bradstreet's findings as "another nail in the tradeable sector in New Zealand".
But he said a positive for exporters over the past few months was that the Australian exchange rate had moved down from its recent highs and was now closer to long-term average levels.
The trading situation in Australia is particularly important because it is New Zealand's largest export market, and is often the first destination for new exporters. The New Zealand dollar is now worth about A85c.
"We're still not into the perfect storm," said Walley.
"If Australia goes back to 92c [against the New Zealand dollar] and we have this [slow payment] problem then we're going to have a real perfect storm against export tradeables.
"We're not quite there. Thank goodness the Australian dollar has come back a bit."
He said to ensure they got paid as their customers began to feel the pinch, exporters needed to keep chasing their debtors and not let their terms of trade slip.
Scott said local exporters were becoming more cautious in their dealing with overseas creditors.
"The prudent companies are just checking and rechecking who they've extended credit to and how they are being repaid, and then being much more watchful of that process."
ADDING UP THE TARDY PAYERS
Percentage of payments made 30 days or more over terms:
* India 55.9 per cent
* Australia 41.2 per cent
* Philippines 39.1 per cent
* Malaysia 38.6 per cent
* Indonesia 37.4 per cent
Source: Dun & Bradstreet
