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Local payment delays ease off in Q3: Singapore Commercial Credit Bureau

FOR the first time in three consecutive quarters, slow payments by local firms have shown visible signs of easing off.

According to the Singapore Commercial Credit Bureau, the proportion of payment delays by local firms inched up only slightly from the previous quarter, increasing by 0.82 percentage points from 41.1 per cent in Q2 2014 to 41.92 per cent in Q3 2014. This was in contrast to the previous quarter when slow payments rose by slightly over three percentage points.

"Despite the downtrend, the decrease in prompt payments over the past three quarters has also similarly plateaued since its first decline in Q1 2014," it said.

According to the bureau, payment delays within the construction sector fell for the first time after two consecutive quarters of increases since Q1 2014, slipping moderately by 3.16 percentage points q-o-q from 51.44 per cent in Q2 2014 to 48.28 per cent in Q3 2014.

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The retail sector emerged as the sector with the second highest proportion of slow payments, registering 47.79 per cent. The bureau attributed this to "weaker consumer demand and a decline in tourist arrivals over the past quarter".

The services industry registered the third highest proportion of slow payments, increasing marginally by 1.43 percentage points q-o-q from 43.85 per cent in Q2 to 45.28 per cent in Q3.

D&B Singapore compiles the figures by monitoring more than 1.5 million payment transactions of firms operating through its Singapore Commercial Credit Bureau. Payment data is contributed to the bureau by local firms. 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 50 per cent of total bills are paid later than the agreed credit terms.