Construction Companies Face Growing Cash Flow Pressure as Payment Delays Reach Record Highs

The Coface APAC Payment Survey 2026 highlights a worsening payment environment in Singapore, with the construction sector experiencing the most significant payment delays and liquidity pressures. Nearly half (49%) of Singapore businesses reported that payment delays have become more frequent over the past year, while 42% observed that delays have become more severe. More than half (52%) expect payment conditions to deteriorate further in the coming year.

For contractors, subcontractors, suppliers and consultants, delayed payment claims can create significant working-capital challenges. The construction industry recorded the longest average payment delay at 85 days, substantially above Singapore’s overall average of 66.3 days. This makes construction the sector most exposed to cash flow constraints arising from delayed payments and outstanding payment claims. The prolonged payment cycle is particularly concerning as Singapore’s construction demand is expected to remain strong, with the Building and Construction Authority forecasting construction demand of between S$47 billion and S$53 billion in 2026. Large project pipelines often require substantial upfront expenditure on labour, materials and services, while payment is received only after lengthy certification and payment processes. Longer project chains and multiple tiers of contracting parties further increase the risk of delayed payments cascading throughout the supply chain.

The survey also found that 57% of Singapore firms experienced at least one customer default during the past 12 months, exceeding the Asia-Pacific average of 45%. Among affected businesses, 31% reported that defaults represented more than 10% of their total receivables, demonstrating the potentially severe financial consequences of unpaid claims and delayed collections.

A key contributor to delayed payment issues appears to be businesses’ reluctance to take early action. Seventy-four per cent of respondents stated that long-standing commercial relationships influence their tolerance for late payments, while 84% acknowledged that relationship considerations can outweigh financial warning signs. Consequently, 65% of firms only strengthen credit controls after payment delays exceed 60 days.

The findings underscore the importance of proactive construction payment claim management. Early identification of payment risks, timely certification and adjudication of claims, and closer monitoring of debtor behaviour are becoming increasingly critical to maintaining cash flow and reducing the risk of payment disputes and defaults in Singapore’s construction sector.