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
| Sep 19, 2012
Sasaki opens office in Shanghai
Office supports firm’s present and future work in China, throughout Asia.
| Sep 18, 2012
MBMA partners with ORNL for whole building energy efficiency study
The results are intended to advance energy efficiency solutions for new and retrofit applications.
| Sep 18, 2012
MKK opens office in North Dakota
MKK is currently working on seven projects in North Dakota, including a hotel, restaurant, truck stop, office building, and apartment complex.
| Sep 18, 2012
Firestone Building Products launches new website
Deep product information and innovative customer support tools are highlights.
| Sep 13, 2012
Leo A Daly Company promotes Kraskiewicz to senior vice president
Kraskiewicz, who most recently served as chief operations officer for the Leo A Daly division, will guide brand management, business development, operations and financial performance for 18 offices worldwide.
| Sep 12, 2012
Harvesting new ways to eliminate waste at the USDA
After installing 20 high-speed, energy-efficient hand dryers in restrooms throughout the USDA headquarters; the USDA reports seeing an immediate 50% reduction in the use of paper towels.
| Sep 11, 2012
RTKL appoints Lance Hosey as Chief Sustainability Officer and Senior Vice President
Author and authority on green design to spearhead RTKL Performance-driven DesignSM initiative.
| Sep 11, 2012
McQuade appointed CEO of Tishman Construction
McQuade will focus on driving the growth of the company into new markets and expanding market share in its current areas of operation.
| Sep 10, 2012
Specialty door types—plenty of functional variety
In the MasterFormat section 08 30 00, Specialty Doors and Frames, a number of door types are listed for special functions, access locations, sliding and folding hardware, and even pressure-resistant types.
| Sep 7, 2012
7 Do's and Don'ts for PV roof rack installation
As PVs grow in popularity, nearly half of all installations require roof rack systems. Our expert tells how to do the job right and protect your client’s roof.
