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
| Jul 22, 2013
International Report [2013 Giants 300 Report]
Building Design+Construction's rankings of design and construction firms with the most revenue from international projects, as reported in the 2013 Giants 300 Report.
| Jul 22, 2013
Suffolk Construction launches fall 2013 subcontractor development series
Successful program to provide disadvantaged, minority, and women-owned subcontractor firms valuable insight on partnering with area’s largest general contractor
| Jul 19, 2013
Top BIM Construction Firms [2013 Giants 300 Report]
Turner, Clark Group, DPR top Building Design+Construction's 2013 ranking of the contractors and construction management firms with the most revenue from BIM-driven projects.
| Jul 19, 2013
Top BIM Engineering Firms [2013 Giants 300 Report]
Jacobs, URS, SAIC top Building Design+Construction's 2013 ranking of the engineering and engineering/architecture firms with the most revenue from BIM-driven projects.
| Jul 19, 2013
Top BIM Architecture Firms [2013 Giants 300 Report]
Gensler, HOK, HDR top Building Design+Construction's 2013 ranking of the architecture and architecture/engineering firms with the most revenue from BIM-driven projects.
| Jul 19, 2013
BIM 2.0: AEC firms share their vision for the great leap forward in BIM/VDC implementation [2013 Giants 300 Report]
We reached out to dozens of AEC firms that made our annual BIM Giants lists and asked one simple question: What does BIM 2.0 look like to you? Here’s what they had to offer.
| Jul 19, 2013
Reconstruction Sector Construction Firms [2013 Giants 300 Report]
Structure Tone, DPR, Gilbane top Building Design+Construction's 2013 ranking of the largest reconstruction contractor and construction management firms in the U.S.
| Jul 19, 2013
Reconstruction Sector Engineering Firms [2013 Giants 300 Report]
URS, STV, Wiss Janney Elstner top Building Design+Construction's 2013 ranking of the largest reconstruction engineering and engineering/architecture firms in the U.S.
| Jul 19, 2013
Reconstruction Sector Architecture Firms [2013 Giants 300 Report]
Stantec, HOK, HDR top Building Design+Construction's 2013 ranking of the largest reconstruction architecture and architecture/engineering firms in the U.S.
| Jul 19, 2013
Best in brick: 7 stunning building façades made with brick [slideshow]
The Brick Industry Association named the winners of its 2013 Brick in Architecture Awards. Here are seven winning projects that caught our eye.
