The average weighted risk level in the economy of businesses on the verge of collapse improved moderately in July compared with the previous month as payment reliability among suppliers stabilized, Business Data Israel reported this week.

"Over the last three months we are seeing an improvement in the average weighted risk level of businesses in the economy although the average risk level is still high compared with the same months last year," said BDI Israel economists. "The trend points to a slowdown of the impact of the global financial crisis on the Israeli businesses."

BDI economists added that despite the improvement the risk level of businesses in the economy was still high in particular if compared with the risk level during July last year.

Out of the total number of companies analyzed by BDI economists 21.9% were rated as highly risky and dangerous with an average weighted risk level of 9 and 10 in July, compared with 23.4% during the previous month. BDI economists noted that these businesses were suffering from great liquidity problems, reports of bouncing cheques, and big losses in revenues and profits. The great level of difficulties faced by these companies and businesses is threatening the continuation of their business activity for the coming year or two, the economists added.

At the top of the list of the riskiest sectors was the tourism and hotel sector. The second riskiest sector was the restaurant and café sector. In third place was the haulage services sector followed by the construction sector.

The strongest and most secure sector in July was the chemicals sector. The paper and carton sector was in second place closely followed by the cosmetics and pharmaceutics sector.

The payment reliability report compiled by BDI Israel showed that the average number of total "late payment" or credit days remained stable in July at 12 days, after reliability worsened by two days in June. However, the average credit period agreed to by businesses and suppliers deteriorated slightly and stood at 92 days compared with 91 in June.

"The stability of late payment days is an indicator of a moderate relaxation of the liquidity crunch," said BDI economists.

The sector with the most lax payment norms in July was found in the production of ceramics and sanitary tools sector where payment was made on average 24 days beyond agreed deadlines, BDI said. In the food, catering and beverage sector payments on average lagged 23 days behind the agreed deadline during the month of July. Payments were also made 20 days late among newspapers and printing houses.

Broken down by sector the most reliable deals were made in the chemicals and drugs sector where on average payment was late 4 days beyond agreed deadlines followed by the paper and carton sector and the telecommunications and Internet sector, where average payment was late 7 days beyond agreed deadlines.