A new national construction-industry report shows very few projects finish on time, and even when they do, payment is slow and incomplete. Results from the most recent payment survey conducted by Levelset and Fieldwire show a clear gap between expectations and reality in the construction industry.
Contractors and suppliers say they have a high degree of satisfaction with work productivity and payment. Yet, at the same time, they overwhelmingly report a lack of planning before a project, wasted time caused by miscommunication on the jobsite, and slow payments that limit their ability to grow. The construction industry accepts project and payment delays as the status quo.
Additional findings from the 2020 survey include:
- Fewer than 1 in 3 contractors (30%) report always finishing projects on time and within budget.
- 70% say jobsite coordination is the main reason projects run over budget or past deadlines.
- 80% of companies say they spend a significant portion of their work week chasing down payments.
- Only half of construction businesses say they receive payment within 30 days of invoicing.
This 2020 report collected responses from more than 540 contractors and was conducted prior to stay-home orders or mandatory shutdowns.
The 2019 National Payment Report stated that “half of U.S. contractors do not get paid on time.” Not much has changed since the last report but the COVID-19 pandemic and current economic landscape is further complicating work coordination and payment problems.
“Delaying subcontractor or supplier payment to protect yourself is an all-too-common practice in the construction industry. Through this survey, we hope to increase awareness around other reasons that potentially delay payment and encourage industry-wide visibility, communication, and collaboration.” said Scott Wolfe, Jr., CEO at Levelset. “The significance of this payment problem is being exacerbated by the current pandemic and potential recession environment we are all living in right now. Slow payment is impacting every stakeholder through the payment chain and we believe that everyone has a right to be paid what they earn in a reasonable timeframe.”
The 2020 National payment report explains the impacts poor coordination and payment speed can have on construction businesses. It also explains that businesses who focus on better construction planning, improving jobsite coordination, and protecting their payments will thrive in the post-coronavirus economy.
Levelset's mission is to empower contractors to always get what they earn. Levelset's products help millions in the construction industry make payment paperwork and compliance easier, get cash faster, monitor the risk on jobs and contractors, and better understand payment processes and rules. The results are faster payments, access to capital, and fewer surprises. Levelset is headquartered in New Orleans, Louisiana, with offices in Austin, Texas, and Cairo, Egypt, and has over 200 employees.
Fieldwire connects your entire field team, from project manager to each specialty contractor’s foreman, on one construction management platform. Its plan-viewing and task-management tools make it easy for anyone to view up-to-date drawings, schedule work, and track punch list items from any device in real-time. Fieldwire’s mission is to be the world’s most trusted field management solution for construction teams on projects of any scale. The platform powers more than 750,000 commercial, industrial, heavy-civil, and residential projects worldwide.