PAYMENT delays, notably in the construction sector, have worsened over the year, according to the Singapore Commercial Credit Bureau (SCCB)'s latest payment statistics released on Monday.
Prompt payments deteriorated strongly, accounting for only 42.18 per cent of total payment transactions in the third quarter of this year, compared to a year ago when 51.05 per cent paid at least 90 per cent of their total bills on time.
Slow payments have also risen markedly, accounting for more than two-fifths of payment transactions in Q3 2016.
Compared to the preceding quarter, prompt payments dipped by 3.74 percentage points to 42.18 per cent in Q3 2016, from 45.92 per cent in Q2 2016. Slow payments inched upwards by 3.76 percentage points to 46.37 per cent in Q3 2016, from 42.61 per cent in Q2 2016.
These were witnessed across the five sectors of construction, manufacturing, retail, services and wholesale. The construction sector registered the highest proportion of slow payments for the third consecutive quarter due to a weaker payment performance by special trade contractors.
Payment delays in the construction sector accounted for more than half of all payment transactions.
"The weaker payment performance in Q3 is a clear indication that firms here are feeling the impact of a credit crunch. The construction sector has, in particular, experienced one of the highest proportions of payment delays in two years since Q3 2014,'' said Audrey Chia, D&B Singapore's chief executive officer.
Ms Chia noted that managing cashflows has always been a major concern of this sector given its complexity, involving multiple suppliers and special trade contractors who undertake specialised works.
"The main challenge for construction firms would be to exercise control over cashflow planning and to compress their cashflow cycles into the shortest period possible," she added.
D&B Singapore compiles the figures by monitoring more than 1.6 million payment transactions of firms operating through its Singapore Commercial Credit Bureau.