Builders facing cashflow squeeze

THE North West’s building contractors are facing lengthening payment terms at a time when workloads are already patchy, according to a new survey.

Constructionline, the pre-qualification scheme for smaller contractors, found that 55% of North West respondents to its nationwide survey said that workloads had decreased but 60% also said payment terms have lengthened.

Clients in the education sector were names as the worst payers and private sector firms paid most quickly.

More encouragingly, only 32% of firms said they had projects cancelled over the
past three months and nearly half of firms said they won their most recent contract from privately-owned clients, suggesting that private sector investment is slowly replacing work lost as a result of public sector cuts.

Michael Waddington, Constructionline’s client relationship manager for the North West and North Wales, said: “SMEs are the backbone of the construction sector but this survey has highlighted that they are not receiving enough support from their clients.

“With workloads dropping many companies need all the help they can get to ensure they survive but instead subcontractors at the tail end of supply chains are facing cashflow worries as payment terms lengthen.

“More has to be done to regulate firms in both the public and private sectors to ensure SMEs aren’t bearing the full-brunt of the economic downturn.”