Singapore among APAC countries leading ultra-long payment delays: report

Payment behaviour the worst in textile and construction sectors.

The share of Singapore companies that experienced ultra-long payment delays increased last year, following a broader regional trend that was also seen in Thailand and Hong Kong, according to a report by Coface.

In its Coface Asia Corporate Payment Survey 2024 report, the firm found that these three Asian nations recorded the highest increase in the proportion of companies suffering from ultra-long payment delays in 2023 versus 2022 levels.

Across Asia Pacific, 29% of the respondents said ultra-long payment delays affected over 2% of their annual sales last year, higher than the 26% share the year prior.

Textile and construction were the most affected sectors in the region. The share of textile firms reporting long overdue payments spiked to 40% in 2023 from just 14% affected in 2022. 

Meanwhile, more than a third (35%) of the respondents in the construction and metals businesses reported ultra-long payment delays. 

The report stated that this presents a high risk for non-payment as a staggering 80% of the delays have not yet been paid.

“Textile faced higher production costs and rampant demand, and construction suffered sluggish China property sector and a high interest rates environment in most markets,” Coface said.

Overall, the report still saw improvements in payment behavior of companies with the average duration of payment delays in APAC dropping from 67 days in 2022 to 65 days in 2023. Still, firms noted that late payments have become more frequent last year (60%) from 2022 levels (57%).

The average payment terms were also reduced to 64 days from 66 days previously as a result of the tight credit environment.

Moving forward, 30% of companies in the region remained optimistic that late payment behaviour could still improve in the future.

The report covered about 2,400 companies across APAC, including Singapore, with respondents active in 13 sectors.