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
| Apr 2, 2012
Sachse Construction helps complete Salt Lake City’s City Creek Center
Sachse was hired to complete store build-outs at City Creek Center.
| Apr 2, 2012
Culver joins Sasaki as managing director
Culver will work closely with Sasaki firm leaders on issues of strategy, marketing, and business development.
| Apr 2, 2012
EB-5 investment funds new Miramar, Fla. business complex
Riviera Point Holdings breaks ground on $17 million office center.
| Mar 30, 2012
New windows and doors revitalize older buildings
With their improved aesthetics, energy efficiency, and durability, replacement windows and doors can add significant value to a renovation project.
| Mar 30, 2012
18 handy tablet apps for AEC professionals
Check out these helpful apps for everyday design and construction tasks. Our favorite: MagicPlan, which uses GPS to help you measure and draw a floor plan of any room.
| Mar 29, 2012
U.K.’s Manchester Airport tower constructed in nine days
Time-lapse video shows construction workers on the jobsite for 222 continuous hours.
| Mar 29, 2012
Roller shade operating system wins IF Product Design Award
Design experts in the iF jury recognized the engineering invested in the RB 500 Roller Shade, including a metal clutch with a patented construction, a durable zamac housing with polished finish, and a chain drive unit that excels in maximum operating comfort.
| Mar 29, 2012
Lehigh engineering student wins Thornton Tomasetti Foundation Awards Scholarship
The scholarship is awarded annually to a graduate student in structural engineering deemed by the department to have the potential to make an impact in the field professionally.
| Mar 29, 2012
Construction completed on Las Vegas’ newest performing arts center
The Smith Center will be the first major multi-purpose performance center in the U.S. to earn Silver LEED certification.
| Mar 29, 2012
Apartments provide permanent housing for California homeless
Gonzalez Goodale Architects designed complex to embrace community and engender sense of pride among residents.
