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More prompt and partial payments made in Q2 in Singapore: SCCB
MAJOR sectors in Singapore enjoyed a higher proportion of prompt and partial payments made in the second quarter of 2015, marking a reverse in the downtrend seen in the preceding quarter when prompt payments dove into a near double-dip.
According to the Singapore Commercial Credit Bureau's (SCCB) latest payment statistics, overall prompt payments have risen markedly by 9.43 percentage points on a quarter-on-quarter (q-o-q) basis to 48.47 per cent in Q2 2015, from 39.04 per cent in Q1 2015. Compared to a year ago, they are up 1.09 percentage points.
SCCB said the latest figure marks the second highest reading within a year when prompt payments were at a one-year high of 50.07 per cent in Q4 2014.
Partial payments accounted for more than one-tenth of payment transactions, while slow payments have also decreased, accounting for slightly more than two-fifths of payment transactions.
The better showing stands in contrast to Q1 2015 when prompt payments accounted for less than two-fifths and slow payments made up more than half of the total payment transactions.
"The improved payment performance comes on the back of a cyclical upturn in the wholesale trade sector and modest expansions in both construction and services sectors," SCCB said.
All five sectors - construction, manufacturing, retail, services and wholesale - saw a decrease in proportion of slow payments compared to the preceding quarter, when they experienced a rise in slow payments.
"This also marks the first time in nearly three years when all sectors experienced q-o-q declines in slow payments in Q3 2012. However, on a y-o-y basis, 2 of five industries experienced an increase in slow payments in Q2 2015," SCCB said. The two were manufacturing and retail.
For the second consecutive quarter, the manufacturing sector recorded the highest proportion of slow payments which has remained almost unchanged in Q2 2015, around 53 per cent. But on a year-on-year (y-o-y) basis, payment delays in the sector have surged by 10.49 percentage points to 53.05 per cent in Q2 2015 from 42.56 per cent in Q2 2014.
SCCB noted that as consumer spending and retail expenditure continued to ease, retailers of food and beverage and general merchandise goods recorded the largest increase in slow payments.
The wholesale trade sector saw the steepest fall in slow payments owing to a turnaround in the wholesale trade of both durable and non-durable goods. The services sector experienced the second highest decrease in slow payments in Q2 2015.
The construction sector saw a decrease in slow payments for the first time in two consecutive quarters since Q3 2014. Last quarter, the construction sector recorded the smallest increase in payment delays against the other sectors.
Audrey Chia, D&B Singapore's chief executive officer, warned that it was unclear if the uptrend would continue into the rest of the year.
"Moreover, the improvements in payment performance were due to cyclical upswings in certain sectors. It would be prudent for firms to take into account any seasonal fluctuations in managing risks and planning for their cashflows," she said.
D&B Singapore compiles the figures by monitoring more than 1.6 million payment transactions of firms operating through SCCB. Prompt payment is classified as when at least 90 per cent of total bills are paid within the agreed payment terms while slow payment is classified as when more than half of total bills are paid later than the agreed credit terms.