Companies in Singapore paid more slowly in 2016 than they did in the prior five years, with prompt payments (at least 90% of invoices paid on time) accounting for less than half the total of payment transactions.
Slow payments occurred in more than two in five transactions in Singapore last year and across the construction, manufacturing, retail, services and wholesale sectors, according to the Singapore Commercial Credit Bureau (SCCB).
According to AsiaOne, prompt payments to companies in Singapore fell 7.23% to 45.87% in 2016 from the prior year. During the fourth quarter of 2016, slow payments rose 7.85% to 43.28% from the year prior.
Typically, payment performance in Singapore improves at year-end due to sales during the holiday season, but some analysts believe companies are more actively enforcing payment terms to improve cash flows.
The food and beverage sector had the highest percentage of slow payers, while the wholesale sector saw the biggest jump in slow payments—8.35%—compared to the prior year, due primarily to a prolonged weakness in trading for oil and petroleum products, the SCCB said.
Bad debts in the heavy construction subsector slowed payment performance in the overall construction sector, with some 47.97%, or 7.6% more, firms reporting they were slow in paying in the final quarter of 2016 than during the same period in 2015, AsiaOne said.
The retail sector came in second in payment delays, hampered by slow growth among retailers in recent months. In manufacturing, payment slowing increased by some 7.63% to 45.4% in the fourth quarter of 2016 compared to the same period in 2015 due to a slowdown in the transport engineering and biomedical engineering subsectors.
– Nicholas Stern, editorial associate