More Singapore companies beat payment deadlines in 2012: survey

Over 50% of commercial transactions are paid on time.

According to a release by the Singapore Commercial Credit Bureau, after staging a strong rebound in Q3 2012, payment performance of local firms continues to be on the rise for the second consecutive quarter. The number of prompt commercial payment transactions have exceeded by more than half in the final quarter of 2012.

This comes after the slight economic upturn in Q4 2012 compared to the flat growth experienced in the previous quarter. In the advanced estimates released by the Ministry of Trade and Industry (MTI) recently, the local economy grew by 1.1 per cent year-on-year (y-o-y) in Q4 2012.

According to the Singapore Commercial Credit Bureau (SCCB)’s latest payment analysis, prompt payment transactions have increased to 51.59 per cent, a moderate 2.29 percentage point increase from 49.3 per cent in the previous quarter.

This also marks the first time in 2 years when over 50 per cent of prompt commercial payment transactions are recorded. A year-on-year (y-o-y) comparison revealed that payment promptness has increased substantially by 12.09 per cent from 39.5 per cent last year.

Payment promptness was at its peak in Q3 2010 when it made up 61.2 per cent of all commercial transactions in Singapore.

Meanwhile, slow payments have increased slightly last quarter by 0.79 percentage points to 40.99 per cent. However, this is the second lowest proportion of slow payments being recorded within the past year.

Partial payments have also decreased by 2.58 percentage points to 7.92 per cent with the construction sector registering the highest proportion of partial payments in the final quarter.

A sectoral breakdown of slow payments revealed that declines in payment defaults were experienced in three of five sectors quarter-on-quarter (q-o-q), unlike the previous quarter when the declines were seen across all five sectors.

With the exception of the wholesale and services sectors, only the construction, manufacturing and retail sectors have seen their slow payments falling.

The decline in proportion of slow payments was most pronounced in the construction sector both q-o-q and y-o-y. Last quarter, slow payments in the construction sector fell by 8.24 percentage points to 41.19 per cent q-o-q.

A y-o-y comparison further revealed a decline by 17.11 percentage points in payment defaults. With heavy government investments in industrial projects and a strong pipeline of nationwide rail transit and road infrastructure projects, the downward trend in slow payments is likely to continue into the next quarter.