With buffers waning, most vulnerable corporates and sectors have been caught between a rock and hard place in 2023, with hospitality, transportation and wholesale/retail on the front line. Excess cash at non-financial corporates remained high in the first half of 2023 at EUR3.4bn in the Eurozone and USD2.5bn in the US, more than +30% above pre-pandemic levels. But this cash buffer remains highly concentrated in the hands of large firms and in specific sectors (tech, consumer discretionary). At the same time, net cash positions are dropping faster than economic activity. Besides hospitality, transportation and wholesale/retail, other sectors are catching up fast, in particular construction, where backlogs of work have been almost completed – especially in the residential segment.
Learn more from Allianz here: https://www.allianz.com/en/economic_research/publications/specials_fmo/2023_10_18-Global-Insolvency-Report.html
