The latest quarterly sector-wide Building Engineering Business Survey, sponsored by Scolmore, has revealed 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 over half (56%) of buyers inserting under-30-day payment clauses in their contracts.
Despite this, over three in four engineering services organisations (77%) say turnover increased or remained steady in Q3 2018, with nearly eight out of ten (78%) predicting their turnover will grow or remain steady for the current quarter (Q4 2018).
Buyers in the commercial sector were identified as the worst payers, with over eight in ten (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, almost a fifth (19%) were paid after 60 days.
Retentions were held against nearly two thirds (58%) of survey respondents. More than half (52%) said that between one and 10% of their organisation’s turnover was tied up in retentions.
ECA deputy director of business policy and practice Rob Driscoll said: “These figures show that overturning the late payment issue remains the key to unlocking productivity, growth and prosperity, particularly with the uncertainty of the next two quarters.
“ECA will continue to work diligently with government, the small business Commissioner and others to gain further support for initiatives such as the Aldous Bill and help the industry to resolve its long-running, and continually damaging, payment problems.”
