Business stability improves as Atradius data reveals signs of recovery

Atradius, the UK’s second-largest trade credit insurer, reports a marginal 1 per cent year-on-year drop in payment defaults* across all sectors, signalling signs of stabilisation in the UK economy. Despite continued inflationary pressure, high operating costs, and global economic uncertainty, some sectors are showing strong signs of resilience.

The most notable year-on-year declines in payment claims (May 2024–May 2025) were seen in the Agriculture (-57 per cent), Electronics (-50 per cent), and Transport (-30 per cent) sectors – highlighting emerging stability in traditionally volatile industries.

Agriculture
Payment defaults in the agriculture sector fell by 57 per cent with improving purchasing power, coupled with stabilising interest rates helping to strengthen the sector.

However, the sector continues to face pressure, with managing working capital remaining a particular challenge, alongside slow-moving inventory and difficulty in freeing up cash from receivables. Atradius’ Payment Practices Barometer – an annual global survey of B2B payment behaviour – found 43 per cent of UK agri-food companies expect the insolvency risk to increase amid economic uncertainty and geopolitical developments affecting trade and supply chains.

Electronics
Driving innovation and growth in adjacent industries, the electronics sector recorded a 50 per cent drop in year-on-year defaults and a 46 per cent fall in claims month-on-month from April to May 2025. Despite this positive trend, data from the Manufacturing Health Index by Unleashed reveals that electronic manufacturers are still under strain, with a 23 per cent decline in sales and profit margins**. Continued investment in R&D and cross-sector collaboration will be key to maintaining momentum.

Transport
Nearly half of B2B transactions in the transport industry are now conducted on credit, according to a new Atradius survey. This strategic move has helped keep payment cycles stable, with the sector seeing a 30 per cent drop in year-on-year defaults and a 25 per cent decline month-on-month. While infrastructure and tech-related risks persist, the transport sector appears well-positioned to navigate ongoing economic headwinds.

However, businesses must be wary of growing competitive pressures within the sector and ensure their technology is equipped to overcome challenge around cybersecurity threats.

Payment practices: delays still a concern
Atradius’ Payment Practices Barometer highlights that 51 per cent of UK B2B invoices remain overdue. The primary causes include customer liquidity issues (34 per cent), process inefficiencies (28 per cent), and invoice disputes (27 per cent).

As a response, UK businesses have scaled back the level of credit extended to customers – now representing 49 per cent of B2B sales. This strategic reduction has allowed 60% of companies to lower Days Sales Outstanding (DSO), easing cash flow pressures and enhancing financial resilience.

James Burgess (pictured), Head of Commercial UK at Atradius, commented:

“It’s reassuring to see a decline in payment defaults, particularly in sectors that have faced significant challenges over the past year. These early indicators of recovery are encouraging, but caution remains key.”

He continued:
“Consumers are still dealing with high prices, and we’ve yet to see a meaningful drop in interest rates. Businesses must stay vigilant against insolvency risks, especially in the second half of the year. Trade credit insurance remains a vital tool, enabling businesses to protect their cash flow, trade confidently, and seize new growth opportunities.”

About Atradius
Atradius is a global provider of credit insurance, bond and surety, collections and information services, with a strategic presence in over 50 countries. The products offered by Atradius protect companies around the world against the default risks associated with selling goods and services on credit. Atradius is a member of Grupo Catalana Occidente (GCO.MC), one of the largest insurers in Spain and one of the largest credit insurers in the world.

*Atradius’ payment default trends data covers UK firms across all UK sectors.
**Electronics manufacturers see 23% fall in sales & profit margins