Slow Payments for Singaporean Businesses Peak in One Year; most affected construction sector, Economy News & Top Stories
SINGAPORE – The proportion of slow payments in local business transactions peaked in one year in the third quarter of this year, due to delays in the construction, wholesale and service sectors, announced on Tuesday the Singapore Commercial Credit Bureau (SCCB). (October 5).
Deferred payments made up over half of total payment transactions during the July-September period, while prompt payments made up just over two-fifths.
This is the second quarter in a row that Singapore has seen a deterioration in the payment performance of its businesses.
SCCB Chief Executive Officer Audrey Chia said: “Given the uncertainties over the course of the pandemic (Covid-19), companies will need to continue to be more vigilant when it comes to credit and improve their credit policies to keep their businesses afloat over the next few months. “
Slow payments rose 0.37 percentage points from the second quarter to 44.93 percent, while year-on-year they were up 0.77 percentage points from 44.16 percent in the third quarter of last year.
Deteriorating settlements led to a decline in prompt payments by 0.25 percentage points in the second quarter to 40.51 percent. However, compared to the third quarter of last year, prompt payments increased 2.12 percentage points.
At the same time, partial payments also fell 0.12 percentage points to 14.56 percent on a quarterly basis and 2.89 percentage points on an annual basis.
The construction sector recorded the highest proportion of late payments for a second consecutive quarter, accounting for more than half of late transactions.
Slow payments for the sector increased 0.34 percentage points from the second quarter to 56.14 percent, the highest level since the fourth quarter of 2017.
Within the industry, the building construction segment accounted for the highest proportion of late payments, while late payments also increased among specialty contractors and the heavy construction segment.
Late payments in the wholesale sector have further increased mainly due to an increase in late payments by wholesalers of durable and non-durable goods.
Quarter over quarter, late payments in wholesale trade increased 1.11 percentage points to 40.09%.
For the service sector, payment delays increased for the second consecutive quarter due to an increase in payment delays for human services, hospitality and accommodation, as well as member services.
Compared with the second quarter, slow payments in the service sector increased 0.8 percentage points to 44.52 percentage points.
The manufacturing sector, however, experienced a decline in slow payments due to a decrease in late payments from manufacturers of transportation equipment, electronics and instruments.
Slow payments by manufacturers fell 0.23 percentage points to 38.75 percentage points.