Most increases in large companies’ WCR were recorded in emerging markets, notably Brazil (+9 days), South Africa (+8) and Russia (+2), - with China as the main exception and the surge in inventories as the key reason. This was accompanied by a strong increase in debt at end 2018: +1pp of GDP in emerging markets in Q4 2018 from the previous quarter. However, advanced economies were not immune, notably the U.S. (+1) and within Europe (+4 days for the Nordics on average, +3 in Germany and Spain). However, several other advanced economies stabilized or decreased their large companies’ WCR through a decrease in Days Sales Outstanding   (Japan, the UK) or an increase in Days Payable Outstanding (Italy, France, Portugal). At a global level, the rise in WCR was concentrated in six sectors: agrifood, automotive, household equipment, paper, utilities and business services. 

Looking at Western Europe, Small and Medium Enterprises (SMEs ) posted better performance in WCR than large companies in 2018. In Italy, SMEs reduced their WCR by -14 days (compared to -4 days for large companies). In Spain, SMEs recorded a -7 days decrease in WCR, while large companies posted a +3 days rebound. WCR slightly improved for French SMEs (-1 day), though it remained stable for large companies. In Germany, WCR for SMEs increased by 2 days and by 3 days for large companies.

However, overall SMEs’ WRC remains one month longer compared to large companies. This is notably visible in Southern European countries, with a spread of 37 days and 22 days in Italy and Spain, respectively, against 23 in Germany and 15 in France. In those four countries, six sectors experienced higher than average WCR for their SMEs (105 days in Italy, 89 in Germany, 81 in France and Spain): textiles, transport equipment, machinery, metals, and, to a lower extent, chemicals and electronics. In terms of variation, the highest increases in WCR were registered mainly in sectors which are dependent on external trade (in Germany: electronics, transport equipment, machinery and equipment, paper and agrifood; in France: electronics, textiles, pharmaceuticals and automotive suppliers).