Payment performance in Singapore has deteriorated according to the Singapore Commercial Credit Bureau (SCCB), a unit of Dun & Bradstreet (D&B) Singapore, which reports that slow commercial payments – classified as when more than 50% of total bills are paid later than the agreed credit terms – hit a record high of 53.8% in Q212, a sharp 11.9% increase from Q112.
On a yearly basis, slow payments increased by 0.7%, reversing the previous quarter’s downward trend when payment delays hit a 12-month low. In a statement SCCB commented: “As global economic woes persist into the second quarter, more firms are running into problems with poor payment made to their suppliers.” At the same time, payment efficiency fell by 7.3% from the previous quarter.
On a year-on-year basis, prompt payment – defined as when at least 90% of total bills are paid within the agreed payment terms – dipped by 1.7%, registering a record low of 37.3%. Additionally, SCCB data showed that fewer firms are making partial payments compared to the preceding three quarters. Partial payments fell 4.6% to 8.9% in Q212.
“The impact of a pull-back in economic growth over the last quarter was clearly evident from the significant increase in payment delays across all industries,” said SCCB.
The retail sector fared the worst; payments made only after the agreed terms of payment stood at 62.4%. Manufacturing and services also fared poorly in payment performance, with slow payments at 57.8% 52.6% respectively. At 54.9%, the construction sector also registered a higher proportion of payment delays compared to the preceding quarter.
Singapore’s wholesale sector, traditionally the most timely when making loan payments, experienced more than 50% slow payment transactions for the first time since SCCB starting compiling payment data. Owing to deterioration in the wholesale trade segment, slow payments increased to 50.9%.
“The positive correlation between weak market performance and poor payment behaviour is clear to us by now,” said Audrey Chia, D&B Singapore’s chief executive officer (CEO). “We have been experiencing a downward trend in slow payment since Q410. Slow payments are definitely on the rise.”
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