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Contractors' cash flows continue to deteriorate; construction worst hit
CONTRACTORS' cash flows continue to deteriorate with the small guys hurting the most in the economy's worst performing sector.
Slow payments by the construction sector in Q1 2017 jumped to 55.22 per cent, up from 47.97 per cent in Q4 2016, said the Singapore Commercial Credit Bureau on Tuesday.
Other than construction, overall there was little change by Singapore firms in their payment performance, reflecting the weak economy.
Services and wholesale showed mild deterioration while there was a big improvement in retail, and moderately so in manufacturing.
On a quarter-on-quarter (q-o-q) basis, slow payments for all sectors have slid slightly by 0.47 percentage point from 43.28 per cent in Q4 2016 to 42.81 per cent in Q1 2017, the Bureau said.
As with Q4 2016, the construction sector registered a new record high in more than 5 years since Q4 2011 when slow payments accounted for nearly three-fifths of payment delays at 58.30 per cent, it said.
The construction sector has also registered the highest q-on-q increase in payment delays owing to a visible deterioration of payment performance by the building construction sub-sector and special trade contractors, it said.
Main contractors typically outsourced to special trade contractors for work such as plumbing, painting, plastering, carpentry, roofing, structural steel erection, glass and glazing works.
Last month, economists said construction will remain the worst-performing sector in Singapore this year.
The sector will grow just 0.3 per cent this year, according to the median forecast of economists in the latest quarterly survey by the Monetary Authority of Singapore.
This was a major downgrade from last December's forecast of 2.4 per cent.
The government has said it will bring forward S$700 million worth of infrastructure projects to help support the construction sector.