Singapore Business Payments Improve for Fifth Consecutive Quarter
According to the Singapore Commercial Credit Bureau (SCCB), local firms have seen a positive trend in payment performance over the past five quarters. In the latest survey report released on Oct 7, the services sector showed significant improvement in reducing slow payments.
Key Findings:
- Prompt payments increased by 0.09 percentage point to 41.2% in the third quarter compared to the previous quarter.
- Year-on-year, prompt payments rose by 0.24 percentage point to 41.2%.
- Slow payments decreased by 0.07 percentage point to 44% quarter-on-quarter and by 0.25 percentage point year-on-year.
- Partial payments slightly decreased by 0.02 percentage point on a quarterly basis.
Industry Performance:
SCCB CEO, Audrey Chia, highlighted that while slow payments have reached a three-year low, there were varying performances across sectors. The construction and manufacturing industries saw slight increases in payment delays.
Firms are advised to closely monitor their cash flows and remain vigilant against potential risks of payment delinquency amidst market uncertainties.
Industry Breakdown:
Three out of the five industries studied recorded a decrease in slow payments quarter-on-quarter, including retail, services, and wholesale trade.
Year-on-year improvements were observed in the construction, retail, services, and wholesale trade sectors as slow payments decreased. Notably, the services sector saw the largest improvement, with slow payments declining for the sixth consecutive quarter.
Service Sector:
The services sector experienced a significant improvement, with slow payments decreasing by 0.23 percentage point to 42.35%. The professional services sub-sector saw the largest decrease in payment delays.
Retail Sector:
Slow payments in the retail sector dropped by 0.03 percentage point to 43.12%, driven by reduced payment delays in general merchandise, fashion apparel, and furniture and home furnishings retailers.
Wholesale Trade Sector:
Payment delays in the wholesale trade sector improved due to a decline in slow payments by durable and non-durable goods wholesalers. Quarter-on-quarter, payment delays fell by 0.18 percentage point to 40.1%.
Construction and Manufacturing Sectors:
In the construction sector, slow payments increased by 0.02 percentage point to 55.26%, with the building construction sub-sector showing the largest increase in payment delays. Meanwhile, the manufacturing sector saw a 0.07 percentage point increase in slow payments.
Overall, the payment performance of local businesses in Singapore has shown positive momentum, with improvements in prompt payments and decreasing slow payments. It is essential for firms to remain proactive in managing their cash flows and mitigating payment risks to ensure financial stability in the face of market uncertainties.