THE Building Engineering Services Association (BESA) has welcomed new research, which shows an apparent ‘dramatic’ improvement in the payment habits of main contractors.
Data gathered by Build UK has revealed that around half of large construction firms now claim to be paying their sub-contractors within 30 days.
While some firms are paying in under 25 days, Build UK said there was still a small number of poor performers, but that the improvement in average payment among the country’s top 34 large contractors had allayed fears the pandemic would prompt a return to bad habits.
The survey showed that the average payment period had improved by four days in the last six months to 30.4 days, which means sub-contractors are being paid on average 15 days faster than when Build UK first started gathering payment data in July 2018.
Build UK’s deputy chief executive Jo Fautley said this proved that ‘construction is serious about changing the way it does business’.
BESA is now urging main contractors and other large construction players to keep up the momentum to bring down payment periods still further.
“Late payment has been a severe drain on cash flow in our sector for many years forcing a number of perfectly well run companies out of business,” said Debbie Petford, the association’s director of legal and commercial.
“Building services firms are facing challenging conditions created by rising inflation and supply issues, so keeping the cash flowing is more crucial than ever – particularly for smaller businesses. There is plenty of work out there and our members are, generally, seeing turnover moving in the right direction, but that makes it even more important that they get paid on time so they can continue to invest in people and processes to be able to deliver projects promptly and on budget.”