The ability of local firms to pay bills slipped in the third quarter, with the construction sector doing the worst.
The percentage of prompt payments dropped to 42.18 per cent of total payments in the three months to last Friday, down from 51.05 per cent in the same period a year earlier, according to the Singapore Commercial Credit Bureau (SCCB) yesterday. In contrast, the proportion of slow payments rose from 38.31 per cent a year ago to 46.37 per cent this year.
"The weaker payment performance in the third quarter is a clear indication that firms here are feeling the impact of a credit crunch," said D&B Singapore chief executive Audrey Chia. The SCCB operates under D&B.
"Firms could adopt alternative measures which provide some relief to their cash-flow problems... This may involve performing a highly rigorous evaluation in the form of credit checks on customers."
The SCCB defines prompt payment as when at least 90 per cent of total bills are paid within the agreed terms, while slow payment occurs when over 50 per cent of total bills are paid later than the terms. It gathers the statistics by monitoring over 1.6 million payment transactions.
FEELING THE IMPACT
The weaker payment performance in the third quarter is a clear indication that firms here are feeling the impact of a credit crunch.
D&B SINGAPORE CHIEF EXECUTIVE AUDREY CHIA
The construction sector showed the worst payment performance in the quarter, recording the largest increase in slow payments - from 39.98 per cent a year ago to 50.82 per cent this year. This was the highest proportion of slow payments among the five sectors that SCCB tracked.
Firms in the wholesale trade have also struggled to pay their bills. Slow payments rose from 32.91 per cent a year ago to 41.16 per cent this year in the quarter.
Slow payments in the service sector climbed from 40.58 per cent a year ago to 48.01 per cent this year in the quarter, "owing to downturn within the business services segment and a fall in tourist arrivals in recent months", said the SCCB.
Manufacturers were also tardier, with slow payments rising from 41.05 per cent last year to 47.13 per cent this year in the quarter. The retail sector's proportion rose from 42.54 per cent last year to 49.35 per cent this year.
Wong Wei Han