Construction Industry Late Payments Rise 26% In 2015

Late payments in the construction industry rose 26% in 2015, according to new figures.

The Euler Hermes Quarterly Overdue Payments Report reveals industry firms registered more payment delays than 'any other single UK sector last year'.

Overall, the sector accounted for 31% of all overdue payments reported.

While late incidents are not uncommon for the industry, payment delays surged in the final quarter of last year and were up 12% compared with July to September.


The most affected sub-sectors were general contractors, civil engineering providers and installers of wiring and fittings - with the latter suffering disproportionately due to large projects running over budget.

Dirk Kotze, Head of Risk Underwriting at Euler Hermes UK, said: "The growth in December's output signaled a positive end to the year for UK construction, but some companies in the sector continues to grapple with the issue of low-margin legacy contracts, rising capital pressures and an increasing skills gap – all putting businesses and payment terms under pressure.

"While some UK industry sectors have seen reductions in overdue payment incidents, insolvencies are set to rise five per cent this year and average day sales outstanding (DSO) is expected to edge up to 56 days. The start to 2016 has seen increased volatility, so companies need to remain vigilant."

(LM)