The German factoring market 2011


Factoring 2011: Factoring continues to grow by 18.89%
Berlin, 28th of March 2012

2011 turned out to be another successful year for the German factoring market. After the extraordinary leap ahead in total turnover by more than 37% in 2010, the industry once more attained a remarkable increment of 18.89%, thus reaching a total factoring turnover of 157.26 billion Euro. The notable gains during the first half of 2011 (an increase of 28%) cooled off slightly during the second half of 2011 which led to a stable 20% in overall growth for the 26 factoring companies represented by the German Factoring Association in 2011.

„On average, the total volume of the factoring turnover increased by nearly 20% on an annual basis over the last ten years. Since 2005, the factoring turnover has nearly tripled, a result for the factoring industry to be proud of“, concludes Joachim Secker, spokesman of the German Factoring Association's executive board, thus giving a graphic summary of the gains during the last years.

Also the number of factoring clients increased by more than 20%, thus reaching a total of 14600 factoring clients.

In 2011, the German economy grew by 3%, a success from which also the factoring market was able to profit strongly and above average. The welcome augmentation is partly a result of the good economic development in certain industries which are important for factoring, but it can also be attributed to rising national consumption expenses, more investments as well as the continuing strength of exports of goods and services „made in Germany“.

Due to the repeated growth, the factoring ratio (referring to the ratio between the total of outstanding balances bought by the factoring companies associated in the German Factoring Association and the GDP) once more crossed an important threshold and now amounts to 6.12% (an increase of 0.82%). Thereby and for the third year in a row, the factoring ratio has increased by nearly 1% per annum. This is statistical proof of the growing importance of factoring, especially for SMEs: The overall factoring turnover of the members of the German Factoring Association currently equals to more than 6% of the German GDP!

The average collection period finally nearly returned to the original pre-crisis level of 40.7 days (in comparison to 41.1 days in 2010 and 2009 and to 40.5 days in 2008). This can mainly be attributed to the strong domestic economic development which secured jobs and thereby improved the payment history of the debtors. The increases in total factoring turnover as well as client numbers are also reflected by the continuing increase of debtors to currently 4,273,000, a plus of 7.8% in comparison to 2010.

The top 5 of the most important key industries in factoring remained largely unchanged: Trade and trade negotiation, services, manufacturing of metal objects and machine construction as well as metal production and metal processing are still the most important key industries. However, some remarkable increases were to be noted for inter alia the production of chemical goods and rubber and plastic goods, while there was a slightly lower increase for the wood industry and other processing trades.

As for the different forms of factoring, inhouse factoring decreased slightly to roundabout 77.2% while full service factoring went up a little and now stands for just over 19% of the total factoring turnover. A reason for this may be that full service factoring is more in demand by SMEs. Moreover, maturity factoring also increased slightly to nearly 3.7%.

For the first time, goods worth more than a trillion Euro were exported in 2011. This boom for products „made in Germany“ also led to a dynamical development in international factoring: Export factoring increased by 15.93% to 34.49 billion Euro while import factoring even grew with 33.21% and thus attained a turnover of 3.65 billion Euro. Growth impulses not only came from longstanding cooperations within western Europe, but also the USA seem to have regained their role in international trade.

Considering the new rules conceived by the Basel Committee on Banking Supervision (Basel III) and their effects also on national legislation as from 2013, it is to be assumed that factoring as a financial service will continue to show a clear potential in Germany, particularly in the SME-sector. Therefore, the members of the German Factoring Association start 2012 optimistically, even though this optimism is slightly less prevailing than in 2011: Nearly 74% of the members expect at least a „good“ development, another nearly 22% predict an at least „satisfactory“ development of the business while only 4% expect a negative development. However, this largely positive outlook on the German factoring market stands under the shadow of (overly) nervous financial markets, the global crisis resulting from state debts as well as growing doubts regarding the political capacity to act in large parts of the world. In addition, the political instabilities in northern Africa and the  tightening situation in the Middle East have to be taken into consideration, the latter with a stronger focus on the important subject of energy supplies.