A National Specialist Contractors Council survey has shown that 82 per cent of specialist contractors are having to wait up to 60 days to receive payment.
Just 4 per cent of respondents to the NSCC’s 2010 Q4 survey say they receive payment within 30 days, while 14 per cent said they have to wait more than 60 days.
The survey also found that 86 per cent of respondents have money withheld against them in retentions and 34 per cent of retention monies are overdue for release.
Despite this, the NSCC survey showed a more positive long-term outlook for contractors.
While the council warns there is unlikely to be sustained growth in the short term, results show that almost half the specialist contractors surveyed are anticipating an increased workload over the next 12 months, compared to 36 per cent in Q3.
Among the main issues affecting contractors were the increase in rate of VAT, clients delaying orders and the difficulty in raising finance while 74 per cent reported increased supplier prices with high inflation impacting on the cost of raw materials, particularly steel.
NSCC chief executive Suzannah Nichol said: “It is disappointing to see that only 4 per cent of specialist contractors are being paid within 30 days in these straitened times.
“Prompt payment is crucial to delivering best value, and this has clearly been recognised by government as the biggest construction client, which has made 30-day payment periods mandatory on its projects.”
The survey results also show:
- 29 per cent of respondents reported an increase in enquiries for Q4 while 33 per cent reported an increase in orders
- 31 per cent report a decrease in enquiries and 36 per cent report a decrease in orders
- Almost half of specialist contractors are anticipating an increased workload over the next 12 months compared to 36 per cent last quarter
- The percentage reporting more difficulty in recruiting skilled labour decreased from 15 to 10 per cent. 23 per cent found it less difficult to recruit
- 86 per cent of respondents have money withheld against them in retentions and 34 per cent of retention monies are overdue for release. On average, 9 per cent of outstanding retentions are written off as bad debts. 18 per cent of companies have used a retention bond as an alternative to cash retention