Local firms’ payment performance worsens further in Q2: SCCB
LOCAL firms’ payment performance continued to deteriorate for a second straight quarter in Q2 2023, said the Singapore Commercial Credit Bureau (SCCB) on Monday (Jul 3).
The credit and risk information solutions provider noted that both prompt and slow payments continued to account for slightly more than two-fifths of total payment transactions, similar to the previous quarter.
Prompt payments in the second quarter declined by 0.11 percentage point on the quarter to 40.92 per cent. Year on year (yoy), prompt payments were down by 0.23 percentage point from 41.15 per cent.
Slow payments advanced 0.10 percentage point quarter on quarter (qoq) and 0.22 percentage point on the year to 44.32 per cent. Partial payments edged up 0.01 percentage point both qoq and yoy to 14.76 per cent.
From a sectoral perspective, four of five industries – manufacturing, wholesale, construction and retail, saw a qoq increase in slow payments in Q2. Services was the only industry that registered a drop in slow payments.
Year on year, the wholesale and manufacturing sectors recorded higher payment delays.
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In the construction sector, slow payments rose for the second consecutive quarter by 0.05 percentage point. On the year, slow payments fell by 0.05 percentage point to 55.70 per cent.
Within the construction industry, the building construction sector accounted for the largest increase in slow payments, rising 0.08 percentage point qoq to 56.23 per cent.
Slow payments among manufacturers rose further by 0.26 percentage point to 38.98 per cent, due to increased payment delays by manufacturers of electronics, chemicals and instruments. Payment delays by manufacturers of instruments saw the largest increase, advancing 0.55 percentage point to 44.15 per cent.
Meanwhile, payment delays in the retail sector increased after four straight quarters of decline. Slow payments were up 0.05 percentage point qoq to 43.35 per cent. SCCB attributed the increase in payment delays to retailers of general merchandise, apparels and accessories and furniture and home furnishing.
Within the services sector, slow payments edged down by 0.02 percentage point both qoq and yoy to 43.13 per cent, as payment delays by health services, business and consumer services fell.
In the wholesale trade sector, slow payments increased 0.12 percentage point qoq to 40.42 per cent, as slow payments by wholesalers of both durable and non-durable goods rose.
SCCB’s chief executive Audrey Chia noted that the manufacturing and wholesale sectors in particular have experienced higher payment delays due to weaker conditions in those sectors.
Prompt payment refers to when 90 per cent or more of total bills are paid within the agreed payment terms. Slow payment refers to less than 50 per cent of total bills being paid within the agreed terms. Partial payment refers to between 50 per cent and 90 per cent of total bills being paid within the agreed payment terms.
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