FOR IMMEDIATE RELEASE
Strong deceleration in Q3 payment delays as local firms turn in
mixed performance -Singapore Commercial Credit Bureau
Singapore, 01 October 2014 – Following two consecutive quarters of strong decline in payment performance,
local payment delays have eased off in Q3. For the first time in three consecutive quarters, slow payments have
shown visible signs of easing off as the proportion of payment delays inched up slightly from the previous
quarter, increasing by less than 1 percentage point. This stands in contrast to the previous quarter when slow
payments increased by slightly over 3 percentage points. Despite the downtrend, the decrease in prompt
payments over the past three quarters has also similarly plateaued since its first decline in Q1 2014. Accounting
for more than 10 per cent of the total payment transactions, partial payments continue to climb towards a new
peak in two-and-a-half years.
According to Singapore Commercial Credit Bureau (SCCB)’s proprietary payment statistics, overall payment
promptness experienced a marginal decline quarter-on-quarter (q-o-q) as it slid by 1.41 percentage points from
47.38 per cent in Q2 2014 to 45.97 per cent in Q3 2014. This marks the third consecutive quarter of decline in
overall payment promptness since Q1 2014. SCCB notes that the year-on-year (y-o-y) increase in prompt
payments is also being reversed for the first time since Q4 2013. Y-o-y prompt payments have declined slightly
by 1.53 percentage points from 47.50 per cent in Q3 2013.
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 per cent in Q2 2014 to 41.92 per cent in Q3 2014. A y-o-y analysis revealed
that payment delays have dropped by 2.60 percentage points from 44.52 per cent in Q3 2013.
Following seven consecutive quarters of increase since Q1 2013, partial payments have hit a new peak,
increasing marginally by 0.59 percentage points from 11.52 per cent in the previous quarter to 12.11 per cent in
Q3. From a y-o-y perspective, partial payments have climbed markedly by 4.13 percentage points from 7.98 per
cent in Q3 last year.
Singapore Payment Performance
Overall Payment Performance (Q1 2010 - Q3 2014)
70.00%
60.00%
50.00%
40.00%
Overall Prompt Payment
30.00%
Overall Slow Payment
20.00%
10.00%
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Q3 - 2014
Q1- 2014
Q2 - 2014
Q4- 2013
Q2- 2013
Q3- 2013
Q1- 2013
Q4- 2012
Q3- 2012
Q2- 2012
Q1- 2012
Q4- 2011
Q3- 2011
Q2- 2011
Q1- 2011
Q4- 2010
Q3- 2010
Q2- 2010
0.00%
Q1- 2010
PRESS RELEASE
Contact:
Eugene Zachariah, Marcom & Product Development
[email protected]
+65 6439 6670/+65 9478 5568
70.00%
60.00%
Construction
50.00%
Manufacturing
40.00%
Retail
30.00%
Services
20.00%
Wholesale
10.00%
0.00%
Q1- 2010
Q2-2010
Q3-2010
Q4-2010
Q1-2011
Q2- 2011
Q3- 2011
Q4- 2011
Q1- 2012
Q2- 2012
Q3 - 2012
Q4 - 2012
Q1 - 2013
Q2 - 2013
Q3 - 2013
Q4 - 2013
Q1 - 2014
Q2 - 2014
Q3 - 2014
PRESS RELEASE
Slow Payments - A Sectoral Analysis
(% of Payments made 30 days or more above terms)
From Q1 2010 to Q3 2014
From a sectoral perspective, slow payments have improved slightly with 3 of five industries experiencing an
increase in payment delays in Q3 2014. This marks a reversal in deterioration in the payment behaviour of local
firms in Q2 when all five industries experienced an increase in slow payments. As with the previous quarter, the
construction sector is the only sector which experienced an increase in payment delays y-o-y. Payment delays
across the remaining industries continue to drop further with the wholesale sector experiencing the largest
decrease in Q3.
Despite being the slowest paymaster in Q3, the construction sector has emerged as one of the only two sectors
experiencing a decrease in slow payments q-o-q. According to SCCB, payment delays within the construction
sector fell for the first time after two consecutive quarters of increases since Q1 2014, slipping moderately by
3.16 percentage points q-o-q from 51.44 per cent in Q2 2014 to 48.28 per cent in Q3 2014. Last quarter, special
trade contractors experienced the largest decline in slow payments, falling by 4.8 percentage points to 47.27 per
cent q-o-q. Special trade contractors refer to the group of contractors undertaking specialized works, performing
only part of the work covered by general contractors. Both building construction and heavy construction subsectors also experienced marginal declines in payment delays, posting 49.79 per cent and 48.01 per cent
th
respectively. Albeit the q-o-q improvement, payment delays within the sector edged upwards for the 4
consecutive quarter, by 1.55 percentage points from 46.73 per cent in Q3 last year, on a y-o-y basis.
Owing to weaker consumer demand and a decline in tourist arrivals over the past quarter, the retail sector
emerged as the sector with the second highest proportion of slow payments, registering 47.79 per cent. Food
and beverage retailers, furniture and home furnishing stores, and retailers of building materials and garden
supplies posted the largest proportion of payment delays at 60.16 per cent, 53.42 per cent and 48.18 per cent
respectively. However, SCCB notes that slow payments within the retail industry dropped slightly by 1.5
percentage points q-o-q. On a y-o-y basis, payment delays have also decreased by 2.48 percentage points from
50.27 per cent in the same quarter last year.
Meanwhile, the services industry registered the third highest proportion of slow payments, increasing marginally
by 1.43 percentage points q-o-q from 43.85 per cent in Q2 to 45.28 per cent in Q3. According to SCCB, the
impact of muted growth within the sector was more felt within the consumer segment. Health services
experienced the highest proportion of payment delays, followed by education services and hotels and
accommodation services at 53.75 per cent, 53.46 per cent and 51.72 per cent respectively. The largest increase
in payment delays was experienced by the education services sub-sector, increasing markedly by 22.33
percentage points. Payment performance of sentiment-sensitive clusters remains weak with most sub-sectors
registering increases in slow payments. Last quarter, the banking sector posted a moderate increase in payment
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PRESS RELEASE
delays by 4.57 percentage points to 30.67 per cent. Credit agencies reported the highest proportion of slow
payments at 51.02 per cent. On a y-o-y basis, slow payments within the services industry fell marginally by 0.54
percentage points from 45.82 per cent.
Due to a sharp contraction in manufacturing output in the general manufacturing and transport engineering
clusters, payment delays within the manufacturing industry has registered the largest increase among the five
sectors, climbing by 1.63 percentage points from 42.56 percentage points in Q2 to 44.19 percentage points in
Q3. Manufacturers of printing and publishing reported the largest increase and highest proportion of payment
delays, up 6.43 percentage points q-o-q to 57.13 per cent while general manufacturers registered the second
largest increase in slow payments, increasing 5.26 percentage points q-o-q to 48.57 per cent. Manufacturers of
transportation equipment have also experienced the second highest proportion of payment delays, sliding by
1.85 percentage points to 50.43 per cent. On a y-o-y basis, payment delays have declined 3.13 percentage
points from 47.32 per cent.
Despite superseding the other industries as a better paymaster, the wholesale sector registered a 1.39
percentage point increase in slow payments q-o-q, from 33.72 per cent in Q2 to 35.11 per cent in Q3. Both
payment delays within the wholesale trade of durable and non-durable goods have increased with the latter
being the main contributor of the slower payments made last quarter. According to SCCB, payment delays within
the wholesale trade of non-durable goods have increased by 5.77 percentage points to 34.74 per cent while
wholesale trade of durable goods have increased marginally by 0.83 percentage points to 35.21 per cent. The
overall slight increase in payment delays is likely to be due to the mixed performance experienced within the
sector. On a y-o-y basis, payment delays within the whole sector experienced the largest decrease by 4.2
percentage points from 39.31 per cent.
“On the overall, local firms have turned in a mixed performance with some sectors outperforming the other
sectors. 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 cashstrapped local firms have to face.” commented Ms. Audrey Chia, D&B Singapore’s Chief Executive Officer.
“The situation is quite unlike two years ago when the likelihood of slow payments becoming delinquent over time
was higher. While our projections remain cautious in light of the low market confidence, we also observe that
firms are less likely to defer payments to their creditors as this would ultimately put a dent in their
creditworthiness in the long-term.” added Ms. Chia.
Commentary
D&B Singapore compiles the figures by monitoring more than 1.5 million payment transactions of firms operating
through its Singapore Commercial Credit Bureau (SCCB). Payment data is contributed to the Bureau by local
firms. Prompt payment is classified as when at least 90% of total bills are paid within the agreed payment terms
while slow payment is classified as when more than 50% of total bills are paid later than the agreed credit terms.
About Singapore Commercial Credit Bureau
Established in 2005, Singapore Commercial Credit Bureau (SCCB) operates a database of local enterprises and
their credit history to provide clients with the insight needed to build trust and improve the quality of business
relationships with their customers, suppliers and business partners. SCCB operates under D&B Singapore.
About D&B
D&B is the world's leading provider of business-to-business credit, marketing and purchasing information and
receivables management services. D&B manages the world's most valuable commercial database with
information on more than 235 million companies. D&B has a database of 100 million tradelines on a global basis
and 26 million within the Asia Pacific region.
Information is gathered in over 220 countries, in 95 languages or dialects, covering 186 monetary currencies.
The database is refreshed more than one million times daily as part of D&B's commitment to provide accurate,
comprehensive information for its customers around the world.
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PRESS RELEASE
For more information, please visit www.dnb.com.sg.
Contact Information
Eugene Z.
Marcom & Product Development
DID: +65 6439 6670
HP: +65 9478 5568
Email: [email protected]
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