Trade payment times deteriorated in the June quarter, continuing a trend that started in March 2020. The construction, retail and transport sectors were hardest hit, along with micro-businesses.
According to illion’s latest late payment report, late payments averaged 11.2 days after the due date in the June quarter – a mild 0.4 per cent deterioration compared with the March quarter and a 3.7 per cent deterioration compared with the same time last year.
Late payment days have worsened by 12.4 per cent since the March quarter in 2020.
Late payment days in the construction sector averaged 10.8 days – the worst figure for the sector in three years.
In the transport sector, late payments have deteriorated by 22.5 per cent since the March quarter 2020.
The deterioration in late payment days in the micro-business sector (five or fewer employees) over the past year was more than twice the overall rate, at 8.3 per cent.
illion chief executive Simon Bligh said: “Despite some level of recovery following the worst of the pandemic, businesses are still struggling to improve their payment times While the situation is not critical, we may see a long period of deterioration leading to a slump in business confidence over 2021 or beyond.”
During the June quarter, 71 per cent of businesses paid their bills on time, while 5 per cent of businesses were paying more than 60 days late.
Bligh said the figures are not alarming but they show a worsening situation that has gone on for over a year.
One bright spot in the data is that payment times from big businesses to small businesses have improved. Big-to-small late payment days averaged 12.7 days in the June quarter, compared with 13.7 days in the June quarter last year.