Payments by Singapore businesses improve for 5th straight quarter

(Photo credit: BT File)

Source: The Business Times

The payment performance of local firms continued to improve for the fifth straight quarter, with the services sector logging the greatest drop in slow payments, said the Singapore Commercial Credit Bureau (SCCB) in a survey on Monday (Oct 7).

The credit and risk information solutions provider noted that both prompt and slow payments accounted for slightly more than two-fifths of total payment transactions.

Prompt payments improved by 0.09 percentage point to 41.2 per cent in Q3 from 41.11 per cent in Q2. On the year, it rose by 0.24 percentage point from 40.96 per cent.

Slow payments fell by 0.07 percentage point to 44 per cent from 44.07 per cent on a quarter-on-quarter basis. It slid by 0.25 percentage point from 44.25 per cent year on year.

Partial payments inched down by 0.02 percentage point on the quarter to 14.8 per cent, though it climbed by 0.01 percentage point from 14.79 per cent on the year.

By industry

Three out of five industries studied recorded a drop in slow payments quarter on quarter – namely retail, services and wholesale.

On the year, the construction, retail, services and wholesale sectors observed improvements in payment performance, as slow payments fell.

The services sector registered the largest improvement, with slow payments improving for the sixth consecutive quarter.

It logged a 0.23 percentage point drop in slow payments to 42.35 per cent from the previous quarter, with the professional services group recording the largest decrease. Year on year, payment delays for the overall services sector were down 0.67 percentage point.

Slow payments in the retail sector fell by 0.03 percentage point to 43.12 per cent, as payment delays by general merchandise, fashion apparel, furniture and home furnishings retailers decreased. Year on year, payment delays were 0.1 percentage point lower.

Payment delays within the wholesale trade sector improved due to a decline in slow payments by durable and non-durable goods wholesalers. On the quarter, payment delays fell by 0.18 percentage point to 40.1 per cent from the previous quarter, and down 0.4 percentage point from the same period last year.

SCCB’s chief executive Audrey Chia said:

“While slow payments have hit a three-year low, the performance was uneven across the sectors, with construction and manufacturing seeing slight increases in payment delays.”

In the construction sector, slow payments rose by 0.02 percentage point to 55.26 per cent in Q3, with the building construction sub-sector registering the largest increase in payment delays. However, on a year-on-year basis, slow payments for the overall construction sector fell by 0.14 percentage point from 55.4 per cent.

The manufacturing sector recorded a 0.07 percentage point increase in slow payments to 39.15 per cent. Year on year, payment delays were 0.03 percentage point higher.

“Firms should continue to monitor their cashflows and exercise greater vigilance to mitigate any potential risks of payment delinquency given the market uncertainties”, said Chia.