25 March 2008
US and UK fall outside the top ten as credit crisis bites
Media Release
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To listen to an audio broadcast with Christine Christian, D&B's CEO click on the following link: http://www.brr.com.au/event/43856 |
Australia continues to be a safe haven for business, holding steady in the number three position behind Austria and Switzerland on the Dun & Bradstreet Global Risk Indicator (GRI) for the second consecutive quarter.
Meanwhile, global turbulence has hurt the rankings of economic heavyweights, including the United States and the United Kingdom, which have both been re-rated since January. Both countries have dropped back their rating to a DB1d and now fall outside of the top ten safest countries in which to do business.
Australia is the only country in the Asia-Pacific region to make the top ten list.
The GRI assesses 131 countries around the world, allocating the highest possible rating to countries that display the lowest degree of uncertainty associated with expected returns such as export payments, and foreign debt and equity servicing.
| According to Christine Christian, D&B's CEO, there is an important message in the latest rankings. "Australian organisations which are involved in cross-boarder business or are looking to enter into new trading relationships need to ensure they have a comprehensive and timely monitoring system in place. "The world is changing every day. The latest risk ratings have seen two of the world's economic heavyweights fall outside of the top ten safest countries. This is a clear indication of just how important global economic information really is." According to the latest D&B Economic & Risk Outlook Report, Australia is facing some turbulence but the outlook continues to be stable. Inflation will continue to be a key concern despite early signs of a local economic slowdown. Strong domestic demand, high levels of capacity utilisation, a tight labour market and robust international commodity prices all point to continuing inflationary pressures at least in the near term. Real GDP growth is forecast to reach 3.2% in 2008 and 2.9% in 2009. This downward revision since the previous quarter reflects national accounts and retail sales data which point to a moderation in domestic spending. |
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Inflation forecasts have also been revised. The forecast for 2008 is up to 3.4% and for 2009 it is 2.9%. Unemployment is expected to remain below 5% through until the end of 2009.
In the United States consumer confidence has declined sharply, leading consumers to delay purchases. This action could be the trigger which drives the economy into recession.
Meanwhile signs of a sharp economic slowdown in the United Kingdom in 2008 are mounting. Data for retail sales and the housing market point towards a year of consolidation, especially for consumer spending.
| Ms Christian says the sub-prime lending crisis in the United States has had significant detrimental impacts on developed economies throughout the world and is clearly a factor in the re-ratings of the US and UK. "US consumers account for fifteen per cent of total world consumption. That means any downturn in the US economy will undoubtedly impact the rest of the world. "Since September of 2007 we have watched these impacts unfold. The US is now teetering on the edge of recession and its downward movement on the risk index reflects this. |
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"Despite the impacts of the liquidity crisis and local economic challenges such as inflation, Australia has managed to retain its number three ranking. This is a positive sign however continued strong economic management is important to ensure that our risk remains low and the business environment strong."
Despite the troubles in the US, a global recession is a remote possibility. World growth should continue to be supported by intra-regional trade among emerging markets and continued strength in key economies such as China.
Global real GDP forecasts for 2008 and 2009 are 3.1% and 3.2% respectively while in the US GDP growth is expected to reach 1.8% and 2.5%.
For further information, please contact:
Danielle Woods
D&B PR Manager
02 8270 2926
About D&B
D&B is the world's leading provider of business-to-business credit, marketing and purchasing information and receivables management services. D&B manages the world's most valuable commercial database with information on more than 130 million companies.
Information is gathered in 193 countries, in 95 languages or dialects, covering 186 monetary currencies. The database is refreshed more than one million times daily as part of D&B's commitment to provide accurate, comprehensive information for its more than 150,000 customers.
The Australasian operations were bought out by the senior management group in August 2001. It was the first MBO of a wholly owned subsidiary in D&B's history worldwide.
Today Lazard Carnegie Wylie owns an approximate 90% stake in DBA and the local management team a 10% stake.
Strategies for future growth include developing DBA's commercial and consumer credit referencing business; expanding its receivables management outsourcing business; maintaining its lead in the development of unique credit and risk scoring products; and developing new products specifically tailored to the Australasian market. DBA currently employs over 500 people in Australia and New Zealand.
