It's a performance rebound.
According to Singapore Commercial Credit Bureau, although a contraction in the domestic economy and a slowdown in externally-oriented manufacturing and wholesale trade sectors look set to prevail for the rest of the year, payment performance rebounded last quarter with the highest proportion of prompt payments in nearly two years.
Here's more from SCCB:
This comes after a poor showing in Q2 with over 50 per cent of slow commercial payment transactions recorded.
In the latest proprietary payment analysis, overall payment promptness hit a new record high in nearly two years at 49.3 per cent, an increase of 12 percentage points from the previous quarter.
A year-on-year comparison revealed that payment promptness increased modestly by 3.3 percentage points from 46 per cent last year. The strongest showing was registered in Q3 2010 when payment promptness made up 61.2% of all local commercial transactions.
Meanwhile, slow payments have fallen by 13.6 percentage points to 40.2 per cent. This also marks a 24-month low of the level of payment delinquency in Singapore when only 27.8% overall slow payments were previously registered in Q3 2010.
Year-on-year slow payments fell markedly by 3.4 percentage points from 43.6 per cent the same quarter last year.
The improved payment trend is also noticeable in the proportion of partial payments made. The latest statistics revealed that partial payments are on the rise, albeit a marginal increase of 1.6 percentage points to 10.5 per cent from the previous quarter.
According to SCCB’s latest payment analysis, payment delinquency has declined across all sectors. After experiencing its worst payment record last quarter, the wholesale sector staged a strong rebound with the largest dip in payment delinquency among all sectors.
Slow payments declined a whopping 19.87 percentage points to 31.03 per cent, which also marks the lowest level registered in 24 months.
Following a lackluster performance last quarter, payment performance for the manufacturing sector took a turn for the better as slow payments fell by 14.03 percentage points to 43.77 per cent.
A similar trend was also observed in the services sector as overall slow payments declined by 13.16 percentage points to 39.44 per cent.
Higher levels of activity in the finance and insurance provided substantial support to growth in the service sector for the third quarter.
Meanwhile, payment delays for the construction sector dipped by 5.47 percentage points to 49.43 per cent. This is mainly attributed to higher certified progress payments made from private sector industrial and residential projects. Growth in the construction sector has also been significantly stronger with a healthy expansion compared to the previous quarter.
Despite a drop in recorded slow payments last quarter, the retail sector continues to be plagued by payment woes as more than 50 per cent of commercial transactions within the sector are made 30 days or more above the agreed terms.
According to the analysis, slow payments fell by a mere 2.69 percentage points to 59.71 per cent quarter-on-quarter. A year-on-year analysis further revealed that the retail sector is the only sector with an increase in slow payments, up 5.71 percentage points from 54 per cent in Q3 2011.
Slow payments for the remaining four sectors have shown visible improvements over the past year. The wholesale sector saw the most improvement with a decrease in slow payments by 5.47 percentage points from 36.5 per cent in the same quarter last year.
Payment delays for both construction and services sector declined by 4.27 percentage points and 4.26 percentage points from 53.7 per cent and 46.2 per cent respectively.
Commenting on the payment behaviour of local companies, Ms. Audrey Chia, D&B Chief Executive Officer said: “It is encouraging to see visible signs of improvement in the payment performance of local companies, especially at a time of dampened market sentiments. Hopefully, the improved payment performance will continue into the final quarter and instill some level of confidence within our local market.”
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