Trade tensions may have led to slower payments by local SMEs: DP Info

THE ongoing Sino-US trade conflict may be starting to make its impact felt on Singapore's small and medium-sized enterprises (SMEs) that are most exposed to global trade, according to a study of payment data of more than 120,000 firms in the country.

In particular, the two sectors most vulnerable to global trade tensions are the commerce-wholesale sector and the transport/storage sector.

In the third quarter, the proportion of SMEs in the commerce-wholesale sector that made their payments within terms fell to 41 per cent from 45 per cent a quarter ago, according to the latest findings by DP Information Group (DP Info).

The proportion of those in the transport/storage sector that made their payments within terms also fell from 43 per cent to 39 per cent for the same period.

The two sectors also showed slight increases in the percentage of SMEs that are more than 90 days delinquent.

In the commerce-wholesale sector, the figure ticked up from 9 per cent to 11 per cent quarter on quarter. Similarly, the transport/storage sector also edged up from 11 per cent to 13 per cent.

James Gothard, general manager, Credit Services & Strategy SEA of Experian, said: “Trade tariffs, through their downstream effects, have the potential to impact Singapore’s SMEs in a number of ways – by reducing the competitiveness of their exports and by affecting sales in overseas markets.

“Even if a specific country is not the target of tariffs, demand for intermediate goods from a country that is the target can be impacted.”