Slow Payments Cost $299 Billion in 2025—a Hidden 14% Tax on U.S. Construction

AUSTIN, Texas, Nov. 13, 2025 (GLOBE NEWSWIRE) -- Rabbet today released the 2025 Construction Payments Report, finding that slow and inconsistent payment practices function like a hidden 14% tax on projects—costing the U.S. construction market an estimated $299 billion in 2025. The study shows the fastest path to lower costs isn’t waiting on macro conditions; it’s making payment timing predictable and using it as a procurement lever that earns sharper pricing and steadier progress.

Key findings:

• The hidden tax: Respondents attribute 14% of total project costs to slow payment—equating to $299B on a $2.139T market.
• Time drain: General contractors spend 65 hours/month managing payments to subs and vendors.
• Root cause: “Lack of organized process” is the top reason cited by both general contractors and subcontractors for slow payments.
• Procurement advantage: 91% of GCs consider an owner’s payment reputation in bids, and 88% declined to bid in the last 12 months due to slow-pay reputations; many offer double-digit discounts for reliable timing.
• Fragile outlook: Confidence in 12-month business survival slipped year over year, particularly among subcontractors.
  
  

“This year’s data is blunt: pay predictably or pay more,” said Will Mitchell, CEO of Rabbet. “Payment timing is one of the few levers of competitive advantage. When you treat predictability as a procurement strategy, contractors sharpen their pencils, schedules stabilize, and the 14% slow-pay tax starts to disappear.”

Methodology

Online survey fielded September 2025 among 125 U.S. contractors (97 general contractors; 28 subcontractors) across building and specialty trades. Results are compared with prior years to assess trends.

Download & media

Download the 2025 Construction Payments Report: rabbet.com/reports/construction-payments-2025

Media contact: marketing@rabbet.com

Attend the Webinar: Unpacking Rabbet’s 2025 Industry Reports

Rabbet will host a 30-minute live webinar to unpack key insights from the 2025 State of Construction Finance and Construction Payments Reports.

Register here.

About Rabbet

Rabbet connects people, data, and systems to maximize real estate outcomes. Since 2017, Rabbet has helped owners and capital partners manage $100B+ in real estate capital with centralized, auditable workflows and real-time insights. Backed by Y Combinator, QED Investors, Camber Creek, and Goldman Sachs. Learn more at rabbet.com.

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