SINGAPORE - Local firms turned in a mixed payment performance for the first quarter of 2017 with improvements seen in the manufacturing and retail sectors while payment delays by construction companies hit a record high.
Prompt payments accounted for less than half of total payment transactions while slow payments have accounted for more than two-fifths of transactions, according to a report by the Singapore Commercial Credit Bureau (SCCB) on Tuesday (April 4).
On a quarter on quarter (q-o-q) basis, slow payments slipped to to 42.81 per cent in the first quarter from 43.28 per cent in the fourth quarter of last year. Year on year (y-o-y), 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, q-o-q prompt payments have on the other hand dipped slightly bto 45.44 per cent from 45.87 per cent in Q4. However, y-o-y prompt payments have improved visibly to 45.44 per cent from 41.11 per cent in Q1 2016.
Prompt payment is classified as when at least 90 per cent of total bills are paid within the agreed payment terms while slow payment is classified as when more than 50 per cent of total bills are paid later than the agreed credit terms, SCCB said.
The construction sector registered a new high in more than five years since Q4 2011 when slow payments accounted for nearly three-fifths of payment delays at 58.30 per cent. The sector also registered the highest q-o-q increase in payment delays owing to a marked deterioration of payment performance by the building construction sub-sector and special trade contractors.
Q-o-q payment delays jumped by 7.25 percentage points to 55.22 per cent in the first quarter from 47.97 per cent in the previous quarter.
On a y-o-y basis, payment delays within the construction sector rose marginally from 52.98 per cent in Q1 2016.