17 January 2002
Manufacturers are taking longer than this time last year to pay suppliers as they fight the continuing contraction in the sector, according to new figures.
The Credit Management Research Centre's (CMRC) quarterly survey of more than 1,000 firms found suppliers in most manufacturing industries were being paid further beyond the due date in the last quarter of 2001.
Machinery suppliers were the hardest hit, being paid 28 days late on average, compared with 17 days in the same period in 2000. Textiles, paper, non-metal and metal manufacturers reported delays of up to a third longer on the year.
Buyers in the construction sector are paying suppliers an average of 21 days late, compared with 14 days in 2000. But firms in the transport and communications and hotel and leisure sectors are paying suppliers twice as quickly as in the previous year.
Professor Nicholas Wilson, director of the CMRC, warned suppliers not to expect a rapid improvement in payment times.
"Payment has deteriorated fairly quickly as manufacturing has faced a downturn, and we expect this to continue in the next quarter," he said. "Small companies need to manage their cash flow and there are signs that they are doing this better."
The findings follow a survey by credit report company Experian that found suppliers are paid an average of 60 days after invoicing.