From struggling Korean Air to the cancelling of the NEC Sign & Digital show coronavirus is hitting business

Coronavirus warning: freeze spending, cut costs and prepare for a tough year (but things will improve)

Not since the Credit Crunch of 2008 has there been such a sudden collapse in global business confidence with stocks dropping and economies from China to Chile taking a nose dive.

Ian Carrotte of ICSM Credit warned last week that firms involved in air travel, hospitality, events and holidays would be the first to be hit by the coronavirus outbreak. As Governments around the world have called for major restrictions placed on a raft of activities from football matches to nightclubs business at all levels is taking a hit. Within hours of Ian Carrotte’s prophesy Flybe went into administration and since then the numbers of companies ceasing trading has risen rapidly as cash flow dries up.

Ian Carrotte said: “Virgin Atlantic cannot keep flying empty planes while Korean Airlines are on the brink having slashed 80% of their international flights. In Somerset Tods Aerospace have called in administrators this week while many of ICSM Credit members will be hit by the cancellation of the Sign &Digital Show at the NEC next month. Traditionally the graphics, printing, signage and communication industries converge on Birmingham for their industrial updates which means deals and orders won’t be made.”

However Ian Carrotte believes the downturn is just the beginning of the crisis as China slashes 90% of its car production and even the Geneva Car Show has been cancelled.

He said: “There is more to this crisis than we are hearing about as so many medics are pointing out that ordinary flu, malaria and measles. Yes it’s a serious illness for the elderly and infirm but either we are not being told the whole story or there’s something more behind the lockdowns and bans on gatherings.

“While large sections of business is being decimated manufacturers of tissues, toilet rolls, hygiene products and facemasks are making hay while the sun shines. And those online firms, internet traders, browsers, social media firms and delivery companies suddenly find they have an open market with fewer competitors.”

ICSM Credit has stressed that keeping a tight grip on credit control is essential and for the moment to put a freeze on inessential spending and even a recruitment block as cash flow dries up.

“As with all crisis’ this one will not run for ever,” Ian Carrotte noted, “we expect with the summer months things will return to normal and we then may get a resurgent economy so those who survive this downturn will be well positioned.”

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

Picture: Jakarta Post