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NEWS AND UPDATES FROM THE HOTEL DEVELOPMENT INDUSTRY
  • Zeke C. Cooper

Slow Payers Hurting Construction Costs

In a recent article by ConstructionDive.com, construction finance platform Rabbet reports that slow payments from owners drive up the cost of construction projects by 5.3%! Highlights from the article:


  • Slow payments are costing GC's nearly $64 billion dollars a year, a increase of over $24 billion since 2018.

  • 51 days is the average payment turnaround

  • GC's and Subs will not bid on work with owners that have reputations for delaying payments

  • 72% of GC's say that they would offer a 1 to 5% discount for quicker payments (remember to ask this of your GC and all Sub's on your next project and get in the contract terms!)

  • GC's are understanding the value of paying their subcontractors quickly due to a busy construction market; with 75% of the GC's surveyed paying multiple times per month.


Mural of the story: Everyone likes to be paid on time and it saves all of us money in the end.


Here's a link to the full article:

https://www.constructiondive.com/news/slow-payers-cost-gcs-subs-64b-a-year/564638/

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