Business debt stress indicators include the average debtors’ days and the debt age ratio – the ratio of debt owed for more than 90 days as a percentage of debt owed under 60 days.
Both accelerated in the fourth quarter of 2012.
David Coleman, head of Analytics at Experian SA said: “This reflects negative feedback from the wave of industrial action in the mining and manufacturing sectors over the third quarter of 2012, which weighed heavily on overall economic momentum and culminated in the rise in business balance sheet stress.”
“While economic growth momentum in the Eurozone is expected to remain depressed throughout the year, which will weigh on South Africa’s own economic performance somewhat, this could be counteracted by strengthening trade ties with China.
“This country is a key export market for South Africa’s mineral exports and South Africa has been identified as strategic partner in Africa by China,” said Coleman.
Debt stress indicators rise
Average debtor’s days for businesses in South Africa rose from 46.1 days in the third quarter to 47.5 days in the fourth quarter.
The debt age ratio showed an increase based on the fact that debt owed in the 90-120 days and 120-plus days categories showed a relatively sharp increase in year-on-year growth in the fourth quarter, while growth in debt owed in the categories less than 90 days slowed down.
In spite of the increase, both measures are still tracking below historical average levels.
Debt by sector
The wholesale retail and trade sector accounted for the largest share of total debt owed by businesses to business with a 36.1% share – up from the 33.5% share in the third quarter 2012.
This was followed by the transport sector at 13.1%.
The finance sector was third, with 9.98% of debt.
The sector that recorded the highest debtor’s days included the household, exterritorial sector at 74.0 days, followed by social and personal services sector at 59.1 days in the quarter.