Slow payments hit new one-year low in Q2 2017

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Prompt payments climbed by 4.87 percentage points from 45.44 per cent in Q1 2017 to 50.31 per cent in Q2 2017 on a quarter-on-quarter basis.

Workers at the Raffles Place financial district in Singapore. (File photo: AFP/Roslan Rahman)

SINGAPORE: Payment performance of Singapore firms improved to hit a new peak in a year in the second quarter of 2017, with retail and wholesale sectors registering the lowest proportion of slow payments, said the Singapore Commercial Credit Bureau (SCCB) in data released on Monday (Jul 3).

Slow payments accounted for slightly less than two-fifths of total payment transactions while prompt payments accounted slightly more than half of the payment transactions, SCCB said.

On a quarter-on-quarter basis, slow payments fell by 4.34 percentage points from 42.81 per cent in Q1 2017 to 38.47 per cent in Q2 2017. Year-on-year slow payments similarly improved, slipping by 4.14 percentage points from 42.61 per cent in Q2 2016 to 38.47 per cent in Q2 2017.

Prompt payments climbed by 4.87 percentage points from 45.44 per cent in Q1 2017 to 50.31 per cent in Q2 2017 on a quarter-on-quarter basis. Year-on-year, prompt payments jumped by 4.39 percentage points from 45.92 per cent in Q2 2016 to 50.31 per cent in Q2 2017.

SLOW PAYMENTS IMPROVED ACROSS INDUSTRIES

The construction sector recorded the highest proportion of payment delays for the sixth consecutive quarter since Q1 2016, accounting for more than two-fifths of payment transactions in Q2 2017.

However, SCCB notes that slow payments within the construction sector have improved slightly due to an increase in public residential and non-residential projects. 

The manufacturing sector registered the second highest proportion of payment delays attributed largely to dampened activities within the trade-related services sector.

According to SCCB, payment delays decreased marginally by 3.13 percentage points from 44.50 per cent in Q2 2017 to 41.37 per cent in Q3 2017.

The services sector registered the third highest proportion of payment delays for Q2 2017. Quarter-on-quarter slow payments slipped by 3.80 percentage points from 44.81 per cent in Q1 2017 to 41.01 per cent in Q2 2017.

Slow payments within the retail sector have improved marginally due to strong growth in retailers of luxury goods despite the weakness experienced by retailers of food and beverage. Payment delays slipped by 4.14 percentage points from 38.08 per cent in Q1 2017 to 33.94 per cent in Q2 2017.

The wholesale trade sector experienced the second largest fall in payment delays due primarily to decrease in slow payments by wholesalers of durable goods. Slow payments decreased visibly by 4.81 percentage points from 39.22 per cent in Q1 2017 to 34.41
per cent in Q2 2017.

‘GREEN SHOOTS WITHIN CERTAIN SECTORS’

“We are definitely seeing visible signs of improvement in payment performance for Q2 2017 due mainly to green shoots within certain sectors,” said Ms Audrey Chia, D&B Singapore’s Chief Executive Officer.

“The retail sector has remained the best paymaster for two consecutive quarters on the back of stronger growth in luxury retail.

“While the severity of payment delays within the construction sector has been reversed, it would be premature to determine if the improvements can be sustained for the rest of 2017. Our findings show that the construction sector has recorded the highest proportion of payment delays for six straight quarters,” she added.

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