SINGAPORE firms were less prompt with their debt repayments in the first quarter of the year as economic growth slowed, credit bureau data has shown.
According to D&B Singapore, which runs the Singapore Commercial Credit Bureau, 51.92 per cent of local firms made prompt payments between January and March, down from 57.73 per cent the previous quarter.
The proportion of companies that were slow to fulfil their payments also increased, from 32.84 per cent in the fourth quarter of last year to 37.88 per cent in the first quarter of this year.
"The slight decline in payment performance was likely due to the vagaries of the trade cycle as local firms are still very much exposed to external headwinds and downside risks," said D&B Singapore chief executive Audrey Chia.
The weaker showing comes amid a deceleration in economic growth, from 6.9 per cent in the fourth quarter of last year to 2.3 per cent in the first three months of this year.
"A similar trend was also observed during the same quarter last year, when a majority of the economic sectors under study experienced slight to moderate decline in payment performance," Ms Chia noted.
That means the weaker performance could be cyclical and should not be an indication of a downward trend carrying over into the next quarter, she said.
"While economic growth has been relatively tepid, overall payment performance of local firms has remained healthy. Over the past four years, prompt payments have been on a general uptrend, possibly a reflection of greater corporate emphasis on practices to improve credit control and cashflow management."
The construction sector had the highest proportion of slow payments in the first quarter, followed by the retail sector. However, retailers were also the only industry grouping that cut down on payment delays as food and beverage retailers enjoyed higher sales receipts.
On a year-on-year basis, local firms have actually improved. Compared with the first quarter of last year, prompt payments have climbed slightly, by 1.54 percentage points.
Payment delays have also dipped year on year, from 43.5 per cent in the first quarter of last year to 37.88 per cent in the first three months of this year.
The slight decline in payment performance was likely due to the vagaries of the trade cycle as local firms are still very much exposed to external headwinds and downside risks.
- D&B Singapore CEO Audrey Chia