Local firms' promptness in paying bills slips in Q3 2017

LOCAL firms' payment performance improved in Q3 2017 compared to a year ago, but their quarter-on-quarter performance has dipped, according to data from the Singapore Commercial Credit Bureau (SCCB).

Across all industries tracked, slow payments - defined as less than 50 per cent of total bills paid within agreed terms - increased to 40.75 per cent in Q3 2017 from 38.47 per cent in Q2 2017- representing an increase of 2.28 percentage points.

Year-on-year, however, local companies' payment performance improved, with the proportion of slow payments declining 5.62 percentage points from 46.37 per cent in Q3 2016.

Of the five industries in SCCB's quarterly update, only the construction sector registered a year-on-year deterioration, with its percentage of slow payments increasing from 50.82 per cent in Q3 2016 to 53.3 per cent in Q3 2017.

The construction sector also saw the highest proportion of payment delays for the seventh straight quarter since Q1 2016, putting the industry's cashflow problems in the spotlight.

The manufacturing, retail, services and wholesale trade sectors, however, improved their promptness in paying their bills compared to Q3 2016.

The retail sector had the lowest proportion of payment delays due to an increase in discretionary spending. The sector's percentage of slow payments came in at 33.96 per cent in Q3 2017, a large drop from 49.35 per cent in Q3 2016.

Across all the industries, prompt payments - defined as 90 per cent or more of total bills paid within agreed terms - stood at 47.43 per cent in Q3 2017, up from 42.18 per cent in the same period a year ago, but down from 50.31 per cent in Q2 2017.

Partial payments - when between 50 per cent and 90 per cent of total bills are paid within the agreed terms - inched up to 11.82 per cent in Q3 2017, compared to 11.22 per cent in Q2 2017 and 11.45 per cent in Q3 2016.