Singapore firms make fewer slow payments in Q1; even hardest-hit construction sector improves

File photo showing workers standing on scaffolding at a construction site in Singapore on March 5, 2018.
File photo showing workers standing on scaffolding at a construction site in Singapore on March 5, 2018.PHOTO: AFP

SINGAPORE - Singapore's construction sector recorded the highest percentage of delayed bill payments for the ninth consecutive quarter, but the overall payment performance of local firms got off to a strong start in the first three months of 2018.

All payment indicators showed improvement, according to a report on Tuesday (April 3) from the Singapore Commercial Credit Bureau (SCCB).

Prompt payments rose by 0.8 percentage points from 50.40 per cent in the fourth quarter of 2017 to 51.20 per cent in the first quarter of 2018. Year-on-year, they climbed by a more visible 5.76 percentage points from 45.44 per cent in Q1 2017. Prompt payment refers to when 90 per cent of total bills are paid within the agreed payment terms.

Slow payments, meanwhile, dropped moderately by 1.18 percentage points quarter-on-quarter from 36.92 per cent in Q4 2017 to 35.74 per cent in Q1 2018. Year-or-year, they fell by a bigger 7.07 percentage points from 42.81 per cent in Q1 2017. Slow payment are when less than 50 per cent of total bills are paid within the agreed terms.

"The first quarter of 2018 saw a strong start for the overall payment performance of local firms as evident from the improvements seen across the majority of the sectors," said Ms Audrey Chia, D&B Singapore's chief executive officer. D&B Singapore compiles the figures by monitoring more than 1.6 million payment transactions of firms operating through the SCCB.

Ms Chia noted that partial payments hit a near six-year high, edging up from 12.68 per cent in Q4 2017 to 13.06 per cent in Q1 2018, "which further reflects the greater emphasis which firms have placed in fulfilling their debts partially if not completely."

Slow payments fell quarter-on-quarter for three of the five industries surveyed, namely the construction, manufacturing and wholesale industries. Two industries - retail and services - made more slow payments than in the previous quarter, compared to one industry in the Q4 2017 survey.

The construction sector - while still the most guilty sector for delayed payments - showed notable improvement. Its level of slow payments dropped 7.69 percentage points from 56.83 per cent in Q4 2017 to 49.14 per cent in Q1 2018.

Said Ms Chia: "Despite the anaemic outlook of the construction sector, slow payments among firms in the sector saw the largest improvements, declining to below half of total payment transactions for the first time in nearly three quarters."

Within the construction sector, special trade contractors contributed the largest quarter-on-quarter fall in slow bill payments while payment delays in the heavy construction sub-sector recorded a significant decline from 56.03 per cent in Q4 2017 to 47.22 per cent in Q1 2018.

Among sectors, the services and manufacturing industries ranked second and third, after construction, for most delayed payments with levels of 38.19 per cent and 36.88 per cent respectively.