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Trade tensions may have led to slower payments by local SMEs: DP Info

THE ongoing Sino-US trade conflict may be starting to make its impact felt on Singapore's small and medium-sized enterprises (SMEs) that are most exposed to global trade, according to a study of payment data of more than 120,000 firms in the country.

In particular, the two sectors most vulnerable to global trade tensions are the commerce-wholesale sector and the transport/storage sector.

In the third quarter, the proportion of SMEs in the commerce-wholesale sector that made their payments within terms fell to 41 per cent from 45 per cent a quarter ago, according to the latest findings by DP Information Group (DP Info).

The proportion of those in the transport/storage sector that made their payments within terms also fell from 43 per cent to 39 per cent for the same period.

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The two sectors also showed slight increases in the percentage of SMEs that are more than 90 days delinquent.

In the commerce-wholesale sector, the figure ticked up from 9 per cent to 11 per cent quarter on quarter. Similarly, the transport/storage sector also edged up from 11 per cent to 13 per cent.

James Gothard, general manager, Credit Services & Strategy SEA of Experian, said: “Trade tariffs, through their downstream effects, have the potential to impact Singapore’s SMEs in a number of ways – by reducing the competitiveness of their exports and by affecting sales in overseas markets.

“Even if a specific country is not the target of tariffs, demand for intermediate goods from a country that is the target can be impacted.”