Construction industry bracing for cash flow problems from May 2006??? 

Construction industry bracing for cash flow problems from May 2006???

Construction industry bracing for cash flow problems from May 2006
By Derek Cher, Channel NewsAsia

Related News
Singapore banks move to five-day clearing week


SINGAPORE : The construction industry is bracing itself for more cash flow problems from May next year.
That is when banks here switch to a five-day clearing week.
Some contractors told Channel NewsAsia they are anticipating a delay in receiving payments when the banks stop clearing cheques on Saturdays.
Cash flow has always been a major concern for contractors.
Those who work under tight margins often need immediate cash to pay their suppliers and workers.
But as banks move to a five-day clearing week, many contractors foresee payments will be delayed - resulting in further cash flow problems.
That is because cheques deposited after the cut-off time on Thursday will only be cleared on Monday - instead of Saturday.
Simon Lee, Executive Director, Singapore Contractors Association, said, "There may be some anxiety. There are cases where suppliers are saying that I will collect the cheque in the morning and then, after I cash it out, then in the afternoon, I will do the delivery. So some of them, when they cross it over the weekend, there may be some concern and say I'm not too sure whether the cheque will bounce and I'm not able to know the status of it."
This may result in suppliers asking for immediate cash payments rather than accepting company cheques.
But what this means is there will be more pressure on contractors to improve their cash positions.
There are also concerns that some main contractors may take advantage of the situation by issuing cheques to their suppliers and subcontractors on Fridays, so that money can't be drawn until the following Tuesday.
This will hopefully give them more time to receive funds from elsewhere.
To cope with the changes, some contractors may start insisting that cheque payments must come in before Thursday.
The Contractors Association says those who process their payments through GIRO will not be affected.
But overall, it expects that the smaller contractors, especially, will have to face the challenging task of having more cash in hand. - CNA/ms

What basis do you claim from your analysis that "Construction industry bracing for cash flow problems from May 2006"? Figures have shown that the Construction industry has recovered and on tracks for steady growth. Unless you are saying, all developers got no money to pay their contractors, which is illogical.
There are distribution in real estate products and there are considerations and factors purchasers will consider when selecting a property, not on a final product that is so exclusive that only a handful of developers can achieve. The natural selective process, will depend on how deep are their pockets, only meant for big players, who has the muscle to achieve it. Those who dive in blindly, without due research and planning, are bracing for a free fall, cause investors are savy, and well informed, unless you are able to create the best by providing the best will you seek to overcome, the limitations of pricing at beyond your market share, cause exclusivity and limited supply, will ensure a healthy bottom line, and if everyone can create similar products, imagine what chaos and confusion, it will do to the market. I will play around with factors, ensuring my final product, is worth its value in gold, cause there is no comparison, for achieving an all round Lifestyle Brand. -oogle.

Let me give you an example. If I have purchase a piece of land with a certain plot ratio and density to built a 500 unit project at $500 per square foot and my target price to sell is at $1000 per square foot. Do you think just by puting in facilities with custom made finishings and consumer products I will achieve my aim? Fat hope. It has to be a total concept, with all the right combination of factors and exclusivity no one has, intergration of residential and commercial concepts of Lifestyle, Branding and convenience, creating a total service, the best of the best before anyone will seriously consider your price, and in order to achieve all these, do you think Singapore has a huge parcel of land for you to chose from? Hint, hint.

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