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Mitigating Risk in Uncertain Times
Defining risk from your agency's perspective is the first step in risk mitigation. While recent economic focus has been largely centered on consumers and the financial services industry, D&B has been focused on the financial impact on businesses relative to payment experiences, bankruptcies and failure rates. D&B insights on these key trends are helping agencies manage their risk during this global financial crisis.
Payment problems are becoming a significant issue around the globe, with 33 countries, including eight in the Asia-Pacific region, paying more than 30% of their bills at thirty days or more past terms. In the past quarter alone, an additional six countries have increased their percentage of overdue payments to more than 30%. This trend is having significant impact on business cash flow at a time when funding to cover shortfalls is difficult to access.
Failure rates are sensitive to the changes in the economy, showing an increasing trend beginning in 2007 - a phenomenon last seen in April 2001 (at the dawn of the last recession.) D&B defines failure as bankruptcies going out of business with unpaid debt in the next 12 months. The rise in the business bankruptcy rate in the U.S. has been well documented, doubling in the last two years. What is not well known or understood, but far more revealing is the rise of failure rates.
Bankruptcy trends by industry show the volatility, but some industries are actually in a decline. Construction, Finance, Real Estate, Retail, Transportation and Wholesale have been the most volatile industries in terms of increasing bankruptcy rates in the last three years. Utilities and Telecom have been declining with Insurance being the least volatile. Contact us to learn more.
Bankruptcy, Failure and Delinquency Rates 2000-2007
Source: D&B Global Analytics
Bankruptcy Trends by Industry
Red indicates high volatility
|
Bankruptcy Rate |
Volatility
Score |
|
2006 |
2007 |
2008 |
| Construction |
0.17% |
0.17% |
0.25% |
13.5 |
| Finance |
0.08% |
0.10% |
0.20% |
18.1 |
| Government |
0.01% |
0.00% |
0.02% |
0.0 |
| Insurance |
0.04% |
0.06% |
0.03% |
7.9 |
| Manufacturing |
0.23% |
0.21% |
0.24% |
10.7 |
| Natural Res. |
0.13% |
0.13% |
0.16% |
12.1 |
| Real Estate |
0.06% |
0.10% |
0.13% |
14.5 |
| Retail |
0.15% |
0.19% |
0.23% |
12.4 |
| Services - Business |
0.11% |
0.11% |
0.13% |
11.6 |
| Services - Other |
0.11% |
0.11% |
0.14% |
11.8 |
| Telecom |
0.23% |
0.27% |
0.18% |
8.2 |
| Transportation |
0.23% |
0.22% |
0.33% |
13.6 |
| Utilities |
0.15% |
0.17% |
0.16% |
10.1 |
| Wholesale |
0.12% |
0.14% |
0.19% |
13.1 |
| Other |
0.12% |
0.07% |
0.09% |
10.6 |
Source: D&B Global Analytics
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Government Vendor Evaluations -
Now Just a Click Away
In uncertain economic times, vendor due diligence is even more critical for procurement professionals. Relying on dated financial statements and vendor references may have worked in the past. But with the recent economic turmoil, contracting officers should re-evaluate existing suppliers and vet new vendors against third party information incorporating best practice predictive risk assessments. Up-to-date, accurate and complete information on small businesses or large corporations provides procurement professionals the best possible foundation for vendor assessment and oversight.
Dun & Bradstreet Government Solutions is pleased to introduce D&B's Contractor Management Portal (CMP) for State & Local Government agencies. It's an easy-to-use web interface enabling agencies to validate supplier registration, vet and evaluate existing and potential new vendors - without a contract or upfront commitment. It just a click away:
> Go to: http://www.dnbgov.com/state_contractor.php
> Search for a company
> Select your company from a candidate list
> Confirm registration
> Purchase an Supplier Qualifier Report* (SQR) via your purchasing card (p-card)
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Strong Turnout for D&B's Scoring and Financials Webinar You asked D&B to provide more education and insight on our data, scores and tools. So we delivered: On October 22 over 100 State & Local government professionals participated in D&B's webinar on How to Interpret D&B Scores and Financials for Additional Due Diligence.The webinar explained what D&B Predictive Scores are, where they come from and how to incorporate in your day-to-day decision making process. The session highlighted differences between the scores, how they're derived, and also showed how to interpret D&B ratios and financial information in our reports.
If you missed the event, click here for the recorded webinar. Or if you have any questions, call 1.800.424.2495.
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7 Simple Questions = Improved Customer Experience
Your feedback is important to us. The more customers who tell us how we are doing, the more we can improve your experience with D&B. To encourage your participation, we thought you would like to see the seven simple questions in our upcoming customer survey.
Customers are asked to respond to the following questions on a 5 point scale ranging from Strongly Agree to Strongly Disagree:
- Taking all aspects of my relationship with D&B into consideration, overall I am satisfied with D&B
- Considering D&B's overall quality in relation to the cost of its business information, D&B offers an excellent value
- D&B is customer focused
- The overall quality of the information provided by D&B is excellent
- The overall quality of the interactions I have with D&B team members is excellent
Customers are also asked to respond to two open-ended verbatims with specific feedback:
- What is the one thing we are doing well and should continue to provide to ensure your success?
- What is the one thing you'd like to see us provide to ensure your future success?
So the next time, our customer survey comes your way, please take a few minutes and let us know how we are doing. In the meantime, you can tell us now, we'll act at 1.800.424.2495.
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Coming in our Next Issue:
What's the State of your State? What D&B knows can help with Economic Development, Employer Marketplace Analysis, and Workforce Development
D&B's U.S. business database includes over 46 million business records nationwide, both active and inactive. So, just how much does D&B know about your state? How relevant is it to growing your state economy? Request a demonstration.
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