Construction sector named worst paymaster in Q3 as cash flow woes plague local firms

Late payments have been rising for four straight quarters.

The construction sector has again clinched the dubious distinction of being Singapore’s worst paymaster in the third quarter of the year, as payment delays within the sector edged upwards year-on-year for the 4th consecutive quarter.

The Singapore Commercial Credit Bureau today revealed that late payments in the construction sector inched up by 1.55 percentage points from 46.73% in Q313 to 48.28% in Q314.

On a quarter-on-quarter basis, late payments from the construction sector slipped moderately by 3.16 percentage points from 51.44% in Q2 to 48.28% in Q3 2014.

The report also showed that overall payment promptness experienced a marginal decline quarter-on-quarter as it slid by 1.41 percentage points from 47.38% in Q2 to 45.97% in Q3. This marks the third consecutive quarter of decline in overall payment promptness since Q1 2014.

Despite an increase in overall slow payments in Q3, payment delays have plateaued slightly, inching up a mere 0.82 percentage points from 41.1% in Q2 to 41.92% in Q3. On a year-on-year basis, payment delays have dropped by 2.60 percentage points from 44.52% in Q3 2013.

According to Audrey Chia, D&B Singapore’s CEO, “While cashflow woes continue to plague local firms, the shift from slow payments to partial payments is also evident based on the statistics for Q3. For three consecutive quarters, partial payments have accounted for more than one-tenth of total payment transactions. The signs are certainly encouraging as far as the deceleration in slow payments is concerned. This is also bearing in mind of the continuing cost constraints which cash-strapped local firms have to face.”