El EL Credit rating increases
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by Karen Miles • Hauliers should find it easier to approach their banks for finance in the wake of publication of a survey showing a sharp upturn in the credit rating of the transport industry.
The "credit quality" of transport companies improved more sharply than for any other sector of the UK economy, according to the banking survey Trends in UK Bank Quality, issued last week by Barclays de Zoete Wedd.
The improvement in the first half of 1994 is expected to increase the willingness of banks to lend to operators and was part of an overall gain in the credit rating for all UK companies.
The report says as a result of the improving economic health of UK industry, ,E6 billion of bank debt was removed from the high-risk category.
But despite its improvement, transport remains at the bottom end of the credit quality league.
Nearly 21% of the sector's companies are rated as a good credit risk with another 17.6% classified as poor.
This compares to nearly 28% of manufacturing companies classified as a "good" credit risk and nearly 16% which are poorly rated.
But the report estimates that all sectors, including transport, will be further stimulated by stronger finances in manufacturing. "This improvement should have positive implications for an early pick-up in bank lending, and also for the economy in general," it says. Credit-worthiness in the Southeast, South-west and East Anglia improved most in the first six months this year.