Local firms’ payment performance improves for 2nd straight quarter: Credit bureau data
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Firms across all sectors registered improvements in slow payments, which is defined as less than 50 per cent of total bills being paid within the agreed terms.
ST PHOTO: KUA CHEE SIONG
Mia Pei
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SINGAPORE – Local firms’ payment performance improved in the final quarter of 2023, with fewer slow payments across all sectors, the Singapore Commercial Credit Bureau (SCCB) said on Jan 2.
The Credit Bureau Asia unit noted that both prompt and slow payments accounted for slightly more than two-fifths of total payment transactions, similar to the previous three quarters.
On a quarter-on-quarter basis, prompt payments improved by 0.09 percentage point to 41.1 per cent in the fourth quarter, from 41 per cent in the third quarter. Slow payments fell by 0.1 percentage point to 44.2 per cent in the fourth quarter. Partial payments inched up by 0.01 percentage point to 14.8 per cent.
Year on year, prompt payments slid by 0.03 percentage point to 41.1 per cent in the fourth quarter. Slow payments remained unchanged, while partial payments climbed 0.1 percentage point year on year to 14.8 per cent in the fourth quarter.
Firms across all sectors registered improvements in slow payments, which is defined as less than 50 per cent of total bills being paid within the agreed terms.
Such overall improvement in slow payments occurred for the first time in two years since the fourth quarter of 2021, SCCB’s CEO Audrey Chia noted.
Slow payments fell further within the construction sector, down 0.08 percentage point quarter on quarter, and by 0.28 percentage point year on year, to 55.3 per cent in the fourth quarter of 2023. The heavy construction sector registered the biggest improvement on the quarter.
In the manufacturing sector, slow payments dropped 0.1 percentage point in the fourth quarter to 39 per cent after six consecutive quarters of increase, due to a decrease in payment delays by manufacturers of electronics, chemicals and transportation equipment. On the year, however, slow payments among manufacturers jumped by 0.5 percentage point.
Payment delays in the retail sector also fell further, led by retailers of general merchandise, apparel and accessories and building materials. It slid by 0.04 percentage point quarter on quarter to 43.2 per cent, and by 0.14 percentage point year on year.
Meanwhile, the services sector continued to register improvements in slow payments, led by decreased payment delays by business, health and consumer services. It dipped 0.1 percentage point on the quarter and by 0.2 percentage point on the year to 42.9 per cent.
Payment delays within the wholesale trade sector improved as both durable and non-durable goods wholesalers reduced slow payments. The sector’s payment delays fell 0.15 percentage point on the quarter, but increased 0.1 percentage point on the year to 40.4 per cent.
“Overall, firms have continued to make more prompt payments for the final quarter of 2023.
“However, the average payment delays have continued to increase further, for the second consecutive year in 2023,” Ms Chia added.
The annual average proportion of slow payments rose further to 44.24 per cent in 2023 from 44.15 per cent in 2022. Prompt payments decreased to 41 per cent, while partial payments inched up to 14.8 per cent.
“Firms will have to continue to exercise more prudence in cashflow management and credit control in the months ahead,” said Ms Chia.
Prompt payment refers to when 90 per cent or more of total bills are paid within the agreed payment terms. Partial payment refers to when between 50 and 90 per cent of total bills are paid within the agreed payment terms. THE BUSINESS TIMES
