British builders are out of pocket by some £2bn every year because clients fail to pay for their work.
Small and medium-sized (SME) building companies are hit, with 70.5% of those which have staff of up to 250 write off an average of more than £10,000 each year, according to a new report looking at small businesses in the industry.
Out of the total of 280,000 construction firms in the UK, the vast majority are small ones.
The study found that annually the entire sector contributes £90bn in gross value added to the UK economy and supports 2.93m jobs.
But SMEs said that late or non-payment was their biggest challenge. Their second greatest was shortage of skills, followed by government red tape and that state of the UK economy.
When firms are not paid, or receive only partial payment, it hinders their ability to pay workers and suppliers. In some cases, it leaves them without sufficient funds go to court to reclaim the outstanding money owed.
The study was from Bibby Financial Services and the Vinden Partnership.
