The cost of floating payments for wages and invoices represents $208 billion in excess cost to the construction industry, a 53% increase from 2021, according to a survey by Rabbet, a provider of construction finance software.
Those costs are passed on to real estate developers and financiers in the form of project delays, added risk, and higher bids from contractors.
Other survey findings include:
- 37% of all respondents report that work has been delayed or stopped due to a delay in payments to crew members
- 62% of general contractors incurred billing charges, financing charges, or other costs when floating payments to others
- There was an 8.5x increase in general contractors using retirement savings to float payments for their business
Though a 53% increase in the cost of slow payments in one year is major, it’s on par when considering the current economic environment, according to a Rabbet news release.
Some contractors said they are boosting their bids 5-10% to help absorb associated costs and are “pickier when selecting bids because of increasing labor and supply prices.”
Related Stories
| Nov 17, 2014
Nearly two years after Sandy Hook, the bloodshed continues
It’s been almost two years since 20 first-graders were shot and killed at Sandy Hook Elementary School in Newtown, Conn., but these incidents, both planned and random, keep occurring, writes BD+C's Robert Cassidy.
| Nov 17, 2014
Hospitality at the workplace: 5 ways hotels are transforming the office
During the past five years, the worlds of hospitality and corporate real estate have undergone an incredible transformation. The traditional approach toward real estate asset management has shifted to a focus on offerings that accommodate mobility, changing demographics, and technology, writes HOK's Eva Garza.
| Nov 17, 2014
Developments in 3D printing can assist architecture in the smallest details
Researchers at the Department of Energy’s Oak Ridge National Laboratory (ORNL) have developed a way for 3D printed metals to be produced with an unprecedented degree of precision.
| Nov 17, 2014
A new BSL-3 public-safety lab debuts in Vermont
The laboratory will be used to perform a wide range of analyses to detect biological, toxicological, chemical, and radiological threats to the health of the population, from testing for rabies, West Nile, pertussis and salmonella to water and food contaminants.
| Nov 17, 2014
Workplace pilot programs: A new tool for creating workspaces employees love
In a recent article for Fast Company, CannonDesign's Meg Osman details how insurance giant Zurich used a workplace pilot program to empower its employees in the creation of its new North American headquarters.
| Nov 17, 2014
Mastering natural ventilation: 5 crucial lessons from design experts
By harnessing natural ventilation, Building Teams can achieve a tremendous reduction in energy use and increase in occupant comfort. Engineers from SOM offer lessons from the firm’s recent work.
| Nov 14, 2014
Bjarke Ingels unveils master plan for Smithsonian's south mall campus
The centerpiece of the proposed plan is the revitalization of the iconic Smithsonian castle.
| Nov 14, 2014
What college students want in their living spaces
In a recent workshop with 62 college students, architects from Little explored the changing habits and preferences of today's students, and how those changes affect their living spaces.
Sponsored | | Nov 12, 2014
Eye-popping façade highlights renovation, addition at Chaffin Junior High School
The new distinctive main entrance accentuates the public face of the school with an aluminum tube “baguette” system.
Sponsored | | Nov 12, 2014
Williams Scotsman plugs into the jobsite
Many of our customers conduct important business from their temporary modular jobsite office and most require access to technology to get their job done effectively and efficiently. SPONSORED CONTENT
