Eight out of ten engineering services firms still aren’t receiving payments within 30 days.
That’s according to the latest sector-wide Building Engineering Business Survey, compiled by the Electrical Contractorss Association (ECA), Building Engineering Services Association (BESA), the Scottish Electrical Contractors’ Association (Select) and the Scottish and Northern Ireland Plumbing Employers Federation (SNIPEF).
The late payments came despite the fact that over half (56%) of buyers have inserted under-30-day payment clauses in their contracts, the organisations claimed.
Nonetheless more than three in four engineering services organisations (77%) said 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%) of contractors 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 1-10% 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.”
BESA public affairs & policy manager Alexi Ozioro said: “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.
“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.”
