Slow payments by Singapore firms rise to 1-year high; construction sector worst hit

SINGAPORE – The proportion of slow payments in transactions by local firms surged to a one-year high in the third quarter, led by the delays in construction, wholesale and services sectors, the Singapore Commercial Credit Bureau (SCCB) said on Tuesday (Oct 5).

Delayed payments accounted for more than half of total payment transactions in the July-September period, while prompt payments accounted for slightly more than two-fifths.

This is the second consecutive quarter Singapore has witnessed a deterioration in payments performance of its companies.

Ms. Audrey Chia, SCCB’s chief executive officer, said; “Given the uncertainties in the developments of the (Covid-19) pandemic, firms will have to continue to exercise more credit vigilance and enhancing their credit policies to keep their businesses afloat in the coming months.”

Slow payments rose 0.37 percentage points from the second quarter to 44.93 per cent, while on an year-on-year basis they increased by 0.77 percentage points from 44.16 per cent in the third quarter of last year..

The deterioration in settling accounts pulled prompt payments down by 0.25 percentage points in the second quarter to 40.51 per cent. However, compared to the third quarter of 2020, prompt payments increased by 2.12 percentage points.

Meanwhile, partial payments also dipped by 0.12 percentage points to 14.56 per cent quarter-on-quarter, and were down by 2.89 percentage points on an annual basis.

The construction sector registered the highest proportion of slow payments for a second quarter in a row, accounting for more than half of the delayed transactions.

Slow payments for the sector were up by 0.34 percentage points from the second quarter to 56.14 per cent – the highest since the fourth quarter of 2017.

Within the sector, the building construction segment accounted for the highest proportion of payment delays, while slow payments also rose in special trade contractors and the heavy construction segment.

Payment delays within the wholesale trade sector increased further due primarily to a rise in slow payments by wholesalers of both durable and non-durable goods.

Quarter-on-quarter, payment delays in wholesale climbed by 1.11 percentage points to 40.09 per cent.

For the services sector, slow payments rose for the second consecutive quarter due to an increase in payment delays by personal services, hotels and accommodation, and membership services.

Compared to the second quarter, slow services payments rose by 0.8 percentage points to 44.52 percentage points.

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The manufacturing sector, however, saw a decline in slow payments owing to a fall in payment delays by manufacturers of transportation equipment, electronics and instrument products.

Slow payments by manufacturers declined by 0.23 percentage points to 38.75 percentage points.

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