Singapore: signs of market stress among businesses

Payment Practices Barometer

  • Singapore
  • Agriculture,
  • Chemicals/Pharma,
  • Construction,
  • Food

16th June 2021

Many more businesses in Singapore than in the rest of Asia expressed liquidity concerns over the coming months.

Introduction

As the Singaporean government continues to phase out the temporary fiscal measures  introduced to support industries through the pandemic, local businesses appear to be very receptive to the use of customer credit riks managment tools aimed at protecting accounts receivable from the risks associated with the 2021 projected uptick in insolvencies.

The Atradius Payment Practices Barometer provides us with the valuable opportunity to  hear directly from businesses how they are coping with changed trading and economic  circumstances caused by the pandemic. The survey questionnaire was completed by   businesses in Singapore during Q2 2021, a full year after the World Health Organisation declared Covid-19 a global pandemic.

Key takeaways from the report

Acting as the main transport and financial services hub for Southeast Asia, Singapore punches well above its weight in the global economy. However, the city-state’s leading status has also meant it has been vulnerable to pandemic-induced supply chain  disruptions and global demand contractions.

Our Payment Practices Barometer survey point to some evident signs of market stress among Singaporean businesses. These include a reported increase in bad debts and an in late payments from B2B customers. As a consequence businesses in Singapore told us they were worried about maintaining adequate cash flow over the coming months.

However, Singapore is one of the world’s strongest economies and a strong rebound is projected for 2021. What remains to be seen is the full impact of the removal of government support over the course of this year, particularly in terms of customer credit risk trend. Within an environment of increased risk, successful businesses will take steps to protect their account receivables and with these the profitability of the business.

Key survey findings for Singapore

  • Singapore sells on credit terms more often than any other economy in Asia, most often to gain a competitive edge
  • Payment terms offered by Singaporean businesses did not change significantly over the past year
  • Late payments affect over half of all B2B sales
  • Businessess who do not outsource collections observe more bad debt challenges
  • Liquidity issues and cost containment top future business concerns
  • Looking ahead, businesses in Singapore appear to be far more optimistic than Asian peers as to improvement in business performance chiefly stemming from domestic economic
    rebound

Interested in getting to know more?

For a complete overview of the payment practices in Singapore and in the local agri-food, chemicals/pharma and construction industries, please download the complete report.

Disclaimer, no warranties and exclusion of liability

Atradius disclaims any representations or warranties of any kind, whether expressed or implied, including but not limited to implied warranties of merchantability and fitness for a particular purpose of (INCLUDING BUT NOT LIMITED TO) any information contained on or provided via this Web Site and/or any service described or promoted on this Web Site, including warranties with respect to infringement of any patent, copyright, or other rights of third parties. Atradius shall not be liable for any injury, loss, damage or expense arising out of any access to or use of this Web Site or any site linked to or from this Web Site, including, without limitation, any loss of profit, indirect, incidental or consequential loss. Atradius furthermore shall not be liable for persons, property damage or especially direct, indirect, incidental, consequential, immediate or subsequent (pecuniary) loss. While Atradius has used reasonable efforts in maintaining a virus-free Web Site, it declines any liability for persons, property damage or especially direct, indirect, incidental, consequential, immediate or subsequent (pecuniary) loss which may result from transmission or downloading of computer viruses. Atradius cannot be held liable for hardware damage, loss of data, alteration of data, or downtime.