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Construction companies hit hardest

Construction companies hit hardest by growing waits for payment

BUSINESSES in the construction sector have been hit hardest of any UK sector by longer waits for their invoices to be paid, with delays increasing 22% in the last year from 67 days to 82 days, according to the Asset Based Finance Association.

The ABFA said UK businesses now face an average wait of 61 days – just a 2% increase from 60 days last year.

However, the construction sector has a particularly long supply chain which includes many small and medium enterprises.

According to ABFA, the slow payment of bills is a major reason why the construction sector has such a high number of insolvencies. Last year 17% of all corporate insolvencies were businesses in the construction sector.

late-payment

Construction companies are hit hardest by late payments – forced to wait 82 days for invoices to be paid

Jeff Longhurst, chief executive of the ABFA said: “The construction sector has a real problem getting clients to pay early on.”

“Long supply chains in industries like construction mean that the ripple effect of delays is likely to affect many other businesses further down. In an industry with high overheads in terms of materials and labour costs, this can be difficult to deal with.”

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