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 27, 2011
FDI hires Allen to round out project team
Allen's experience includes managing several multi-million dollar facilities projects for Stanford University.
| Sep 19, 2011
Portland team hired as LEED and commissioning consultants for $5.5B downtown sustainable project in Qatar
The $5.5 billion sustainable downtown regeneration project underway by Msheireb Properties will transform a 76 acres site at the centre of Doha, Qatar’s capital city, recreating a way of living that is rooted in Qatari culture, attracting residents back to the city center and reversing the trend for decentralization.
| Sep 14, 2011
USGBC L.A. Chapter's Green Gala features Jason McLennan as keynote speaker
The Los Angeles Chapter of the nonprofit USGBC will launch its Sustainable Innovation Awards this year during the chapter's 7th Annual Green Gala on Thursday, November 3.
| Sep 14, 2011
Lend Lease’s role in 9/11 Memorial & Museum
Lend Lease is honored to be the general contractor for the National September 11 Memorial & Museum project at the World Trade Center site in New York City.
| Sep 14, 2011
Thornton Tomasetti’s Poon named to the Council on Tall Buildings and Urban Habitat’s Board of Trustees
During his 30-plus years of experience, Poon has been responsible for the design and construction of super high-rise structures, mixed-used buildings, hotels, airports, arenas and residential buildings worldwide.
| Sep 12, 2011
LACCD’s $6 billion BIM connection
The Los Angeles Community College District requires every design-build team in its massive modernization program to use BIM, but what they do with their 3D data after construction is completed may be the most important change to business as usual.
| Sep 12, 2011
PVs play new roles as a teaching tool
Solar installations are helping K-12 schools around the country save money and teach students the intricacies of renewable energy sources.
| Sep 12, 2011
Living Buildings: Are AEC Firms up to the Challenge?
Modular Architecture > You’ve done a LEED Gold or two, maybe even a LEED Platinum. But are you and your firm ready to take on the Living Building Challenge? Think twice before you say yes.
| Sep 9, 2011
Hardinger joins Ryan Companies as vice president, mission critical
He will lead the Ryan team responsible for building and developing data centers and other mission-critical projects, and will oversee business development, client relationships, executive level communications and overall marketing strategies for the division.
| Sep 8, 2011
Boldt Co. reaches 4 million hours with a lost time accident
Four million hours. That’s an average of over 2,600 continuous safe work hours completed by every employee—the equivalent of one person working 24 hours a day for over 450 years.
