Local firms turned in a mixed payment performance in the first quarter with improvements in the manufacturing and retail sectors while payment delays by construction companies hit a record high.
Prompt payments accounted for under half of the total payment transactions while slow payments accounted for more than two-fifths of transactions, according to a Singapore Commercial Credit Bureau (SCCB) report yesterday.
Slow payments slipped to 42.81 per cent in the first quarter from 43.28 per cent in the fourth quarter of last year. Year on year, slow payments fell to 42.81 per cent from 46.58 per cent in the first quarter of 2016. Despite the slight improvement in slow payments, quarter-on-quarter prompt payments dipped to 45.44 per cent from 45.87 per cent in the fourth quarter. But prompt payments year on year improved markedly to 45.44 per cent from 41.11 per cent in the first quarter of 2016.
Prompt payment is classified as when at least 90 per cent of total bills are paid within the agreed terms while slow payment is classified as when over 50 per cent of total bills are paid later than the agreed credit terms, SCCB said.
The construction sector registered a new high since the fourth quarter of 2011 when slow payments accounted for nearly three-fifths of payment delays at 58.3 per cent. It also registered the highest quarter-on-quarter jump in payment delays owing to a marked deterioration of payment performance by the building construction sub-sector and special trade contractors - jumping by 7.25 points to 55.22 per cent in the first quarter from 47.97 per cent in the previous quarter. Year on year, the payment delays rose marginally from 52.98 per cent in the first quarter of 2016.