The number of UK companies which delay paying bills rose considerably in the final quarter of 1999, according to research by credit insurer EULER Trade Indemnity.

A survey of more than 400 companies reveals that the trend of late payments continues to worsen, with construction and distribution firms reporting the sharpest rises in the fourth quarter of last year.

Manufacturing and service sector companies also suffered longer delays, even though the overall rate of increase eased during the quarter.

Payment delays from overseas customers were also reported to have risen in the final quarter, but the rate of increase in delays eased during the period to its slowest for the year.

EULER TI chief economist William Simpson believes the increase in late payment is linked to the impact of widespread price discounting, and is an unwanted effect of a speeding-up in activity.

"The economy and manufacturing are growing at their fastest pace for five years, decisively ending the recent slowdown phase," he said.

The survey, conducted by NTC Research, questioned companies with turnovers ranging from £250,000 to over £50 million.