SINGAPORE - Local firms payment performance rebounded in the first quarter of 2019 following three consecutive quarters of decline, except for the construction sector, the Singapore Commercial Credit Bureau (SCCB) said on Tuesday (April 2).

Prompt payments rose to slightly more than half of total payment transactions, while slow payments comprised more than a third, SCCB said in its latest quarterly report.

Prompt payment refers to when 90 per cent or more of total bills are paid within the agreed payment terms, while slow payment is defined as when less than 50 per cent of total bills done so.

On a quarter-on-quarter (q-o-q) basis, prompt payments increased by 7.87 percentage points to 51.70 per cent in Q1 2019, from 43.83 per cent the quarter before.

Slow payments decreased by 1.43 percentage points to 36.59 per cent, from 38.02 per cent the quarter before.

Meanwhile, partial payments fell by 6.44 percentage points to 11.71 per cent in the first quarter, from 18.15 per cent the quarter before. Partial payment occurs when between 50 and 90 per cent of total bills are paid within the agreed payment terms.

From a year-on-year (y-o-y) perspective, prompt payments inched up by 0.5 percentage points; slow payments increased by 0.85 percentage points and partial payments dipped slightly by 1.35 percentage points.

Among five sectors, construction was the only one which experienced an increase in slow payments q-o-q, while the other four - manufacturing, retail, services and wholesale - saw improvements.

"The rebound in payment performance should come as no surprise given that slow payments have been on a decline since Q4 2018," said Ms. Audrey Chia, D&B Singapore's chief executive officer.

She added: "With the exception of the construction sector which has seen worsening debts from the previous quarter, the remaining sectors have experienced a decrease in slow payments. However, compared to the same quarter in 2018, we have noted a slight increase in payment delays. This could be attributed to tightening cashflows and a generally dimmer outlook among firms here."

D&B compiles the figures by monitoring over 1.6 million payment transactions of firms operating through its unit SCCB.

The construction sector saw slow payments worsen in Q1 2019 after four straight quarters of improvement. Its slow payments rose 4.49 percentage points q-o-q to 47.72 per cent, from 43.23 per cent in Q4 2018. Y-o-y, slow payments decreased by 1.42 percentage points to 47.72 per cent.

Building construction accounted for the largest increase in slow payments, up by 6.0 percentage points to 50.18 per cent in Q1 2019. The heavy construction sector also saw an increase in slow payments by 3.94 percentage points to 48.54 per cent. Meanwhile, payment delays by special trade contractors increased by 3.17 percentage points to 44.76 per cent in the first quarter.

In the manufacturing sector, a 2.33 percentage points dip in slow payments was observed q-o-q to 36.65 per cent for the first quarter. Y-o-y, slow payments dipped by 0.23 percentage points to 36.65 per cent. This was due to a decrease in payment delays by manufacturers of printing and publishing, petroleum and coal products and leather products.

In the retail sector, slow payments fell 4.02 percentage points q-o-q to 37.73 per cent, thanks to retailers of furniture and home furnishings, apparels and accessories and food and beverage. But y-o-y, slow payments jumped by 8.75 percentage points to 37.73 per cent.

The service sector saw a 1.50 percentage point fall q-o-q in slow payments to 34.49 per cent, its fourth consecutive quarter of fewer slow payments. This was due to fewer payment delays within the leisure and recreation, hotels and accommodation and consumer services sub-sectors.

Y-o-y, slow payments for the services sector dropped 3.70 percentage points to 34.49 per cent.

Meanwhile, the wholesale trade sector saw payment delays rebound slightly due to a decrease in slow payments by wholesalers of non-durable goods. Q-o-q, payment delays fell by 1.39 percentage points to 34.25 per cent for the first quarter. Y-o-y, slow payments increased by 1.47 percentage points to 34.25 per cent.