French trade credit insurer Coface has downgraded its ratings for Australia and New Zealand.

Despite solid predicted growth this year – 2.8% for Australia and 3.2% for New Zealand – Coface has placed their A1 ratings under negative watch.

The insurer says Australia’s mining sector is largely driving this growth, which masks the troubled manufacturing and tourism sectors.

Outside the mining sector, longer payment periods are resulting from companies’ difficulties in obtaining credit, Coface says.

In the six months to February, business bankruptcies increased by 17% in Australia and 109% in New Zealand, according to the insurer.

Coface determines ratings based on a country’s economic outlook and the average level of payment defaults by companies.

In its most recent review it has upgraded its ratings for the US and Japan amid signs of economic growth.

The insurer downgraded Portugal’s rating as the economic contraction in the Eurozone worsens, and downgraded Argentina’s rating due to a worsening business situation.