Even in the months leading up to the coronavirus (COVID-19) pandemic, construction businesses were struggling to finish projects and get paid, according to a national construction industry report conducted by Levelset and Fieldwire. The 2020 National Construction Payment Report found that less than one in three contractors report always finishing projects on time and within budget and 70% blamed poor jobsite coordination for budget and deadline overruns. The report also found 80% of respondents spend a significant portion of their workweek chasing down payments.
The report, which collected responses from more than 540 contractors prior to the outbreak of COVID-19, found half of respondents were not getting paid on time. Scott Wolfe, CEO of Levelset, said the current pandemic and recession will only make slow payments and cash flow problems worse.
“Contractors and suppliers wait too long to get paid for their work and materials,” Wolfe, CEO at Levelset, said in a prepared statement. “This payment survey helps contractors identify what they can do to reduce project and payment delays. These are practices that benefit everyone in the industry.”
Over three-quarters of respondents said they were “happy” with how quickly jobs are being completed and over half of contractors said they were content with how quickly they receive payment for their work. Despite these positive findings, the report also found fewer than 30% of businesses say they always finish projects on time and within budget and nearly 80% of contractors said coordinating field work is “somewhat” or “very” challenging. One in six respondents said they typically wait 60 days or longer after invoicing to get paid.
According to Levelset, construction businesses are losing more than one full day of every week due to inefficiency. Two-thirds of respondents spend more than a quarter of their work hours waiting for work to get done and nearly three-quarters of respondents say their company spends less than half of their time doing actual construction work.
