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Rampant late payment by cowboy customers is seriously damaging economic growth and employment in Europe, research carried out by NOP for the European Commission has revealed and the building industry is one of the worst sectors affected.
The findings, presented at the Annual Congress of the European Building Confederation (EBC) at Macon, France, showed that late payment is a major problem for small businesses across Europe. Worryingly, it revealed that European governments other public bodies are often late payers, particularly in in Europe.
Of the 3,000 European firms questioned, the research found:
- 62% of firms questioned had cashflow problems as a result of overdue payments.
- 40% of firms had their growth limited as a result of overdue payments.
- over 30% of firms survival was threatened as a result of overdue payments.
- 35% of late payments were being deliberately withheld.
Newly elected President of the EBC, Ted Evans OBE of E.G. Evans & Co Ltd and member of the Federation of Master Builders, underlines the problems faced by small companies:
"Every day I worry whether I am going to get paid for the work that I have done. Cash flow management is a constant problem. Late payment can easily become non-payment and this can be fatal for small firms."
"The problem of cowboy customers who won't and don't pay is enormous and affects almost every builder in Europe. We need an assured payment system that guarantees that a builder will be paid for the work he does."
Mr Evans has been elected as President of EBC for two years and plans to use his presidency to further the cause of small construction companies, with particular regard to maintaining their competitive position.
First posted: 7 October 1998. Last modified: 02 February 1999.
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