Local firms’ payment performance worsens slightly in Q1: SCCB
Bryan Kow
THE payment performance of local firms has deteriorated slightly in the first quarter of 2023 after a slight improvement in the fourth quarter of last year, said the Singapore Commercial Credit Bureau (SCCB) in a report on Tuesday (Apr 4).
Both prompt and slow payments accounted for slightly more than two-fifths of total payment transactions, according to data from SCCB.
On a quarter-on-quarter (qoq) basis, prompt payments were down by 0.1 percentage point to 41 per cent in Q1. Year on year (yoy), prompt payments fell 0.02 percentage point.
Slow payments edged up 0.1 percentage point both qoq and yoy to 44.2 per cent.
Meanwhile, partial payments rose 0.1 percentage point qoq to 14.8 per cent, but fell 0.1 percentage point on the year.
From a sectoral perspective, four out of five sectors registered an increase in slow payments on the quarter. These sectors are construction, manufacturing, services and wholesale. Retail was the only sector that saw a fall in slow payments.
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On the year, only the manufacturing and wholesale sectors experienced a climb in slow payments.
Within the construction sector, slow payments increased for the first time in four consecutive quarters in Q1. On the quarter, slow payments rose by 0.1 percentage point and fell 0.3 percentage point yoy to 55.7 per cent.
Special trade contractors accounted for the largest increase in slow payments, rising 0.1 percentage point qoq to 55.6 per cent.
Slow payments in the manufacturing sector rose by 0.2 percentage point qoq and by 0.6 percentage point yoy to 38.7 per cent. Electronics manufacturers saw the largest increase in payment delays, rising 0.2 percentage point qoq to 45 per cent.
Slow payments in the retail sector fell further for the fourth consecutive quarter in Q1, slipping 0.02 percentage point qoq and dropping 0.5 percentage point yoy to 43.3 per cent.
This was largely due to a decrease in slow payments by retailers of building materials and garden supplies, furniture and home furnishing, and apparels and accessories, said SCCB.
Slow payments within the services sector increased by 0.03 percentage point qoq and fell 0.2 percentage point yoy to 43.2 per cent.
For the wholesale trade sector, payment delays rose by 0.1 percentage point qoq and increased 0.5 percentage point to 40.3 per cent.
SCCB’s chief executive Audrey Chia noted the slight deterioration in payment performance shows that firms have been experiencing tighter cash flows in the past months.
“Firms should continue to exercise greater credit vigilance in the face of market volatility and uncertainties in the months ahead,” she added.
Prompt payment refers to when 90 per cent or more of total bills are paid within the agreed payment terms. Slow payment refers to when less than 50 per cent of total bills are paid within the agreed terms. Partial payment refers to when between 50 per cent and 90 per cent of total bills are paid within the agreed payment terms.
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