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Growth continues despite late payments

UK: The building services industry has reported steady growth, despite ongoing payment and retention problems across the sector.

The latest Building Engineering Business Survey for Q3 has revealed that up to eight out of ten engineering services organisations say they typically receive payment more than 30 days after the due date. This comes despite 56% of buyers inserting under-30-day payment clauses in their contracts.

Despite this, 77% of engineering services organisations say turnover increased or remained steady in Q3 2018, with 78% predicting their turnover will grow or remain steady for Q4.

Buyers in the commercial sector were identified as the worst payers, with 83% saying they received payment more than 30 days after commercial work. For public sector work, on average, 71% of respondents were paid after 30 days. Overall, 19% were paid after 60 days.

Retentions were held against nearly two thirds (58%) of survey respondents. More than half (52%) said that between 1 and 10 per cent of their organisation’s turnover was tied up in retentions.

The sector-wide survey is organised by the Building Engineering Services Association (BESA), the Electrical Contractors’ Association (ECA), the Scottish electrical trade body SELECT and the Scottish & Northern Ireland Plumbing Employers Federation (SNIPEF).

“It is great to see more growth in the sector and industry, but it is frustrating to know that the growth figures would be even bigger if late payment was not impacting so many businesses,” commented BESA public affairs and policy manager Alexi Ozioro. “The Government’s recent commitment to legislation on the issue of retentions is very encouraging, and we can only hope that the wider fair payments landscape moves along too.”

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