Data compiled by Build UK on how quickly its member companies pay their suppliers indicate that the construction industry is moving in the right direction.
Over the past year, the average time taken to pay invoices by Build UK contractor members has reduced by five days to 40 days, with the average percentage of invoices paid beyond terms falling from 34% to 25%.
In fairness, most of the slowest payers are tier two or three specialist contractors who themselves have to wait a month or more before getting their money before they can then pass it on to their suppliers.
Many of the tier one contractors – William Dixon, Mace, Clugston, Vinci, Wates, Vinci Interserve, ISG, SIr Robert McAlpine and Morgan Sindall – are averaging 30 to 36 days to pay invoices.
Among those with shorter arms, struggling to reach their wallets, are Balfour Beatty (averaging 40 days) BAM (41) Bouygues(42) Galliford Try (54) and Engie (62).
The average number of days that Kier takes to pay suppliers has come down from 57 days for July – December 2018 to 41 days for January – June 2019. Kier is failing to meet agreed terms on 45% of invoices received, and 25% take longer than 60 days to be paid.
By contrast Willmot Dixon meets agreed terms on 89% of invoices received and only 2% take longer than 60 days.
Build UK said that construction was the only sector that is benchmarking performance. It said that “the increased transparency is starting to change the industry’s culture and drive improved practices”.
Deputy chief executive Jo Fautley said: “Over the past year, Build UK members have taken significant steps to improve payment performance within their organisations, demonstrating the value of increased transparency. Whilst there is still work to be done, with a number of companies recently being suspended from the Prompt Payment Code, this issue is now firmly under the spotlight at a senior level and these latest results show that the industry is serious about tackling it”.