Property Development and Construction

Payment Behaviour Analysis: Property development and construction Sector

An extensive review of payment behaviour within the Property development and construction sector, comprising a robust sample of 327 companies, reveals a highly stable and predictable financial landscape. Upon analysing the central tendency of the data, the sector demonstrates a commendable efficiency in settling invoices. The average payment time stands at 34 days, closely aligned with a median payment time of 32 days. This narrow gap between the mean and the median indicates that the data is not significantly skewed by extreme outliers, suggesting a standardised payment culture across the industry. Furthermore, the standard deviation of 12.7 days is relatively low, implying that payment performance is consistent and reliable, rather than erratic. For suppliers and creditors operating within this market, such consistency is a positive indicator of healthy working capital management amongst these firms.

When we organise the data by distribution buckets, it becomes evident that the vast majority of companies favour prompt settlement. A combined total of 81.7% of the analysed entities fall within the 'Fast' (0-30 days) or 'Moderate' (31-45 days) categories. Specifically, 40.7% of businesses settle within the first month, whilst an additional 41.0% pay within 45 days. This clustering is reinforced by the interquartile range analysis, which shows that the middle 50% of companies pay between 27 and 40 days—a tight window of just 13 days. Such data allows credit managers to forecast cash flow with a high degree of accuracy. It is worth noting that whilst 57.7% of invoices are paid within 30 days, the data indicates a 'Late Payment' rate of 22.4%. This disparity suggests that whilst funds are moving relatively quickly, a significant portion of the sector operates on strict 30-day terms which are frequently, albeit only slightly, exceeded.

A critical aspect of risk assessment is the identification of distressed payers. In this regard, the Property development and construction sector displays exceptional resilience. Notably, there are zero companies classified in the 'Critical' category (90+ days), and the slowest payer in the entire sample settled at 82 days. This absence of extreme delinquency is a vital signal for credit insurers and lenders, as it significantly minimises the risk of bad debt write-offs. Conversely, the sector boasts 35 top-performing companies that settle accounts in under 20 days, with the fastest payer clearing debts in a mere 3 days. One must realise, however, that whilst the risk of total default appears low, the 15.6% of companies falling into the 46-60 day bracket represents a segment where cash flow pressure may be beginning to accumulate, warranting closer monitoring.

Geographically, the commercial activity is heavily centred around London and the South East. London alone accounts for 86 companies, representing over a quarter of the sample size. When combined with the South East (42 companies) and the East of England (44 companies), it is clear that the financial gravity of this sector is concentrated in the southern regions. However, there is notable representation in the North West (32 companies) and West Midlands (23 companies), suggesting a national footprint. In summary, the Property development and construction sector exhibits mature and responsible payment behaviour. Whilst credit control teams should remain vigilant regarding the 22.4% of payments that slip past agreed terms, the overall risk profile is low, characterised by a complete absence of long-term bad debt within the analysed period.