Publicaties

The outlook for the Brazilian food sector is benign, due to an ongoing economic rebound and robust demand from China as largest food export market.

Commodity price increases have added pressure on many food manufacturers, stuck between farmers demanding higher prices and powerful retail chains.

Average payment duration in the food sector is 40 days, and the amount of payment delays and insolvencies remains low compared to other Dutch industries.

As food processors and retailers demand longer payment terms from their suppliers, a wave of longer payment terms is being created along the supply chain.

The outlook for food exports remains positive, with further demand growth from overseas expected, due to the strong reputation of “Made in Italy” food.

Key challenges for food retailers are the increasingly competitive market environment and the very high wage pressure, which is diminishing profit margins.

A hard Brexit remains a major threat to the Irish food sector, despite ongoing efforts of food exporters to diversify shipments away from Britain.

The recent profit margin increase is expected to bottom out in the coming months due to a slowdown in inflation and increasing competition in food retail.

The average payment duration in the food industry is 60 days, and the number of payment delays remained low in 2017, with no increase expected in 2018.

Global economic momentum, which began picking up in H2 of 2016, has solidified through the year. However, now is not a time for complacency.

Overcapacity remains the main challenge, as the rebalancing of the economy from investment and export-driven growth towards private consumption continues.

The steel and metals sector remains resilient for the time being, but the market environment is turning increasingly difficult with more downside risks.

Demand from construction and automotive as key buyer sectors has been robust in 2017, and steel price increases have been pushed through the supply chain.

While in general insolvencies are not expected to rise sharply, an increase in business failures in Puerto Rico and the Houston area cannot be ruled out.

Both the rebound of steel and metals prices and increased domestic demand have helped to improve margins in 2017, which nevertheless remain tight.

Export orientation and diversification are key factors for business success in a business environment characterised by overcapacity and volatile prices.

Due to a high non-performing assets level banks remain reluctant to provide loans, and external financing at competitive conditions remains a challenge.

While the profit margin development is generally stable competition remains high with Asian steel and metals businesses on international markets.

While the outlook for late 2017 and 2018 remains positive, due to overcapacity there is on-going price pressure in most segments, affecting margins.

Production has increased again in 2017, but competitiveness of the domestic steel and metals industry remains negatively impacted by high power costs.