Payment delays among local companies have hit a three-year low and slow payments improved for the fifth consecutive quarter in 3Q2024, according to a report released by the Singapore Commercial Credit Bureau (SCCB) on Oct 7.
SCCB is a subsidiary under the Credit Bureau Asia TCU (CBA), a credit and risk information solutions provider in Southeast Asia. It monitors more than 2.4 million payment transactions in which data is contributed by local Singaporean firms.
According to the report, slow payments fell by another 0.07 percentage points (ppts), from 44.07% in 2Q2024 to 44% in 3Q2024. On a y-o-y basis, slow payments fell by 0.25 ppts from 44.25% in 3Q2023 to 44% in 3Q2024.
On a q-o-q basis, prompt payments improved by 0.09 ppts, from 41.11% in 2Q2024 to 41.2% in 3Q2024. On a y-o-y basis, prompt payments rose by 0.24 ppts, up from 40.96% in 3Q2023 to 41.2% in 3Q2024.
The report found that partial payments slid marginally by 0.02 ppts from 14.82% in 2Q2024 to 14.8% in 3Q2024. On the other hand, y-o-y partial payments grew by 0.01ppts from 14.79% in 3Q2023 to 14.8% in 3Q2024.
Prompt payment refers to when 90% or more of the total bills are paid within agreed payment terms. Slow payment refers to when less than 50% of total bills are paid within agreed payment terms and prompt payments refer to when between 50% and 90% of total bills are paid within the agreed payment terms.
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Both prompt and slow payments accounted for slightly more than two-fifths of total payment transactions.
Besides monitoring payment behaviours among firms, the report also considered the impact of payments on five sectors, construction, manufacturing, retail, services and wholesale.
The report found that q-o-q, slow payments fell in three of the five industries in 3Q2024 , and on a y-o-y basis, four of the five industries also experienced improvements in slow payments.
In the construction sector, the report found that slow payments have increased for a second consecutive quarter in 3Q2024.
On a q-o-q basis, slow payments rose slightly by 0.2 ppts from 55.24% in 2Q2024 to 55.26% in 3Q2024. On a y-o-y basis, slow payments fell by 0.14 ppts from 55.4% in 3Q2023 to 55.26% in 3Q2024.
In the manufacturing sector, slow payments saw an increase for the second consecutive quarter in 3Q2024. This can be attributed to a fall in payment delays by manufacturers of instruments and chemicals and general manufacturers, the report notes.
On a q-o-q basis, slow payments increased by 0.07 ppts from 39.08% in 2Q2024 to 39.15% in 3Q2024. While on a y-o-y basis, slow payments rose by 0.03 ppts from 39.12% in 3Q2023 to 39.15% in 3Q2024.
The retail sector continued to see a decrease in payment delays in 3Q2024, the report states, noting that this is due to a decrease in slow payments by retailers of general merchandise, fashion apparel, furniture and home furnishing.
On a q-o-q basis, slow payments fell 0.03 ppts from 43.15% in 2Q2024 to 43.12% in 3Q2024. On a y-o-y basis, slow payments fell by 0.10 ppts from 43.22% in 3Q2023 to 43.12% in 3Q2024.
With regards to the services sector, slow payments improved for the sixth consecutive quarter. According to the report, this is because of a fall in payment delays by the health, professional and consumer services sub-sectors.
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On a q-o-q basis, slow payments fell 0.23 ppts from 42.58% in 2Q2024 to 42.35% in 3Q2024. While on a y-o-y basis, slow payments fell significantly by 0.67 ppts, from 43.02% in 3Q2023 to 42.35% in 3Q2024.
In wholesale trade, payment delays improved in 3Q2024. The report states that this is due to a decrease in slow payments by wholesalers of both durable and non-durable goods.
On a q-o-q basis, payment delays fell by 0.18 ppts from 40.28% in 2Q2024 to 40.1% in 3Q2024. While on a y-o-y basis, slow payments decreased by 0.4 ppts from 40.0550% in 3Q2023 to 40.10% in 3Q2024.
SCCB’s CEO, Audrey Chia, says: “The overall improvements in payment performance for 3Q2024 is a sign of greater prudence among local firms in optimising their cash flows and extending the appropriate credit terms.”
However, she warned that performance in slow payments was uneven across the sectors with construction and manufacturing seeing slight increases in payment delays. “Firms should continue to monitor their cash flows and exercise greater vigilance to mitigate any potential risks of payment delinquency given the market uncertainties,” she ends.
