Payment performance of local firms improved for the third consecutive quarter in Q2 2022, according to data from Singapore Commercial Credit Bureau (SCCB) released on Monday (Jul 4).

SCCB’s chief executive Audrey Chia noted that this is largely due to improvements in the construction and services sectors. She was however bearish on the outlook of the payments sector in the coming months, based on expectations of slower growth and downside risks in global supply chains.

“Firms will need to exercise continued credit vigilance and mitigate potential cashflow risks,” Chia said.

On a quarter-on-quarter (q-o-q) basis, prompt payments inched up slightly by 0.1 percentage points while a year-on-year (y-o-y) comparison shows an improvement of 0.4 percentage points to 41.2 per cent in Q2 2022.

Slow payments fell further by 0.1 percentage points q-o-q, dipping 0.5 percentage points y-o-y to 44.1 per cent this quarter.

Partial payments were down 0.1 percentage points from last quarter, but rose 0.1 percentage points y-o-y to 14.8 per cent in Q2 this year.

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Prompt payment refers to when 90 per cent or more of total bills are paid within the agreed payment terms, while slow payment happens when less than 50 per cent of total bills are paid within the agreed terms. Partial payment refers to when between 50 per cent and 90 per cent of total bills are paid within the agreed payment terms.

Construction, retail, services and wholesale saw improvements in slow payments, both on a quarterly and yearly basis. The manufacturing sector saw a deterioration in slow payments q-o-q, owing to an increase in payment delays by manufacturers of petroleum and coal products, chemicals, tobacco, said SCCB in its report.

Slow payments for the manufacturing sector inched up by 0.2 percentage points q-o-q but fell 0.7 percentage points y-o-y to 38.2 per cent in Q2 2022.

In the construction sector, slow payments improved marginally in Q2 2022 after deteriorating slightly in the previous quarter. Slow payments dipped by 0.20 percentage points q-o-q while y-o-y slow payments fell by 0.05 percentage points to 55.8 per cent in the second quarter this year.

The retail sector saw slow payments fall 0.2 percentage points q-o-q and 1.7 percentage points y-o-y to 43.6 per cent in Q2 2022. SCCB attributes these improvements to fewer slow payments by retailers of general merchandise, apparels and accessories, furniture and home furnishing.

Slow payments within the services sector improved further in Q2 2022 due to a fall in payment delays by personal services, business services and social services. Figures from the report show that slow payments q-o-q fell 0.2 percentage points, while y-o-y slow payments eased 0.6 percentage points to 43.2 per cent in Q2 2022.

Payment delays within the wholesale trade declined slightly on a quarterly basis due to a dip in slow payments by wholesalers of both durable and non-durable goods, said SCCB.

Payment delays fell 0.1 percentage points q-o-q but jumped 0.7 percentage points y-o-y to 39.70 per cent in Q2 2022.