Local companies' payment performance slips in second quarter

Slow payments rose by 1.44 percentage points to 37.18 per cent in the second quarter, but dropped 1.29 percentage points year-on-year.
Slow payments rose by 1.44 percentage points to 37.18 per cent in the second quarter, but dropped 1.29 percentage points year-on-year.PHOTO: LIN ZHAOWEI FOR THE STRAITS TIMES

Local firms slipped back a touch in the time taken to pay their bills in the second quarter after six months of improvement.

Prompt payments - when at least 90 per cent of a bill is paid within the agreed terms - came in at 49.55 per cent in the three months to June 30. This was down 1.65 percentage points from the first quarter and 0.76 percentage point down on the same period last year.

Slow payments - when less than half of a bill is settled - rose by 1.44 percentage points to 37.18 per cent in the second quarter, but dropped 1.29 percentage points year-on-year.

Partial payments - when 50 to 90 per cent of a bill is paid - inched up 0.21 percentage point from the first quarter to 13.27 per cent, and came in 2.05 percentage points higher than in the same quarter last year.

Slow payments improved quarter-on-quarter in the services and construction sectors but deteriorated in manufacturing, wholesale and retail, according to the Singapore Commercial Credit Bureau (SCCB). Data analytics firm D&B Singapore compiles the figures by monitoring over 1.6 million payment transactions by firms through its SCCB database.

The wholesale trade sector had the largest increase in delays due largely to a rise in slow payments for durable goods.

Slow payments by wholesalers of such goods rose 4.33 percentage points from the first quarter to 37.59 per cent in the second.

Slow payments for the overall wholesale trade sector increased from 32.78 per cent in the first quarter to 36.94 per cent in the second, and were up from 34.41 per cent in the same period last year.

While the retail sector chalked up the lowest proportion of slow payments in the second quarter, sellers of apparel and accessories, building materials, furniture and home furnishings were becoming tardier about settling accounts.

The construction sector - which has had the highest proportion of payment delays since the first quarter of 2016 - lifted its performance for the second quarter running. Slow payments fell by 1.81 percentage points to 47.33 per cent in the second quarter, although they were up 2.17 percentage points over the same period last year.

Manufacturers' slow payments worsened due to delays by makers of apparel and other textiles, and tobacco and rubber.

D&B Singapore chief executive Audrey Chia said: "Overall, payment performance has remained at relatively healthy levels despite the slight increase in slow payments from the previous quarter.

"We have also seen a spike in partial payments within the manufacturing and wholesale trade sectors over the past quarter.

"From a year-on-year perspective, both partial payments and slow payments have improved on the back of growth within manufacturing, retail and services compared to a year ago."

A version of this article appeared in the print edition of The Straits Times on July 04, 2018, with the headline 'Local companies' payment performance slips in second quarter'. Print Edition | Subscribe