Payment defaults for UK businesses decreased by 17% in Q2 2024, largely contributed to by falls for claims in construction materials, food and transport.

According to data from Atradius, the construction sector has seen a 28% decrease in payment defaults quarter-on-quarter. Improved demand, as the economy slowly returns to life, has also helped the food and transport industries, where claims fell by 31% and 30% respectively from Q1 to Q2 2024.

Despite these encouraging figures, the insurer is warning that prolonged economic and sector challenges are having a significant impact on some business sectors across the UK.

James Burgess, head of commercial and insolvency expert at Atradius, commented: “It is very encouraging to see the declines in default rates across most sectors, as businesses start to benefit from the gradual uptick in the economy.

“However, businesses still very much have a battle on their hands, as consumers continue to face high prices, the cost-of-living crisis persists and we’re still waiting for an interest rate cut to bring down borrowing costs.

“This could make the second half of the year challenging for many firms. Amid the ongoing challenging conditions, companies need to be aware of how to protect themselves against the domino effect of insolvency. It remains crucial for businesses to protect themselves with trade credit insurance, enabling them to trade with confidence and explore new markets or products.”

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