Experian's latest monthly Business Benchmark Report shows that businesses of all sizes were relatively stable in the first half of 2010, with only slight variations in the average percentage of dollars delinquent and percentage of dollars severely delinquent.
Exceptions were seen only among very large businesses (with more than 1,000 employees) and mid-size businesses (with 100 to 249 employees), both of which saw significant improvements in percentage of dollars delinquent.
· Nearly all industry groups remained stable in the percentage of dollars delinquent and severely delinquent since the start of the year. Exceptions include the Utilities and Retail Trade sectors, which showed significant improvements in the percentage of dollars delinquent. The Utilities sector also saw a large improvement in the percentage of severely delinquent dollars.
· California, Massachusetts, New York and Pennsylvania were the only states with the largest metropolitan areas that showed improvement in the average percentage of dollars delinquent. In terms of percentage of dollars severely delinquent, Texas, Massachusetts, Pennsylvania and California were the only ones that consistently fell below the national average since the beginning of the year.
Experian's reports also shows that since the start of the year, businesses with more than 1,000 employees have experienced a 25.9% improvement in the average commercial risk score category - jumping from 33.0 in January to 41.5 in June.
By contrast, non-employer firms - meaning those that have no paid employees - showed a 3.3% improvement for the half overall, including a dramatic drop in Q2, falling from 61.2 in March to 59.9 in June.
When looking at average days beyond terms (DBT), however, the latest (June) report showed that very large businesses paid their bills 24.2% slower than they did at the beginning of the year, going from 6.6 DBT in January to 8.3 DBT in June. Non-employer firms saw an increase of 12% in DBT, going from 5.0 DBT in January to 5.6 DBT in June.
While the increase in DBT indicates slowness in average payment behavior, the likelihood of these segments becoming severely delinquent over the next 12 months (as evidenced by the improvement in risk scores) is apparently lessening.
Other key findings from this month’s Business Benchmark Report include the following:
· The average commercial risk score for June was 58.2. When compared with the beginning of the year, this score has improved by 1.6%. However, Q2 showed some decline, as the national average score has actually fallen by 1% since March when it peaked at 58.6.
· Almost all industry sectors have improved in the risk score category since the end of Q1. The greatest improvements were found in Public Administration (from 60.4 to 61.4 — 1.7%), followed closely by Transportation (from 52.1 to 52.9 — 1.6%).