Research among members of the Building & Engineering Services Association (B&ES) has revealed an improvement in market conditions over the past six months, with more firms experiencing an increase in orders and enquiries.
This, in turn, has generated optimism about future prospects for the sector in 25% of respondents – and two-thirds in the case of the largest B&ES firms.
In contrast to the findings of the previous two state of trade surveys (undertaken in July 2012 and January 2013) both turnover and direct employment levels were reported to have stabilised, and there was widespread expectation that workforce numbers would increase in the short term, along with apprentice recruitment.
Overall, a fifth of respondents had seen an increase in their order books in the past six months, with prospects for the residential sector – previously identified as suffering most severely from the economic downturn – showing particular improvement. Also discernible were a slowing down of the drop in tender prices, the re-emergence of skills shortages in certain disciplines and a likely increase in investment in vocational education and training.
Rising material costs
The principal negative elements highlighted by members were rising materials and, in some cases, labour costs, and a further increase in the prevalence of pre-qualification questionnaires – with the larger members indicating that the introduction of PAS91 as a standard pre-qualification specification for use across the construction industry has done little so far to simplify the process.
“The findings of this survey paint a rather more encouraging picture than we have seen since the start of the downturn – and one which should provide some modest encouragement across the building engineering services sector and the wider construction industry,” commented B&ES Chief Executive Roderick Pettigrew.
While acknowledging that the signs of recovery were fragile at best, he added that the time had come for all organisations involved in construction to start preparing for growth in the medium to long term.
“Of course, we still have a long way to go to return to pre-recession business levels, but it does seem that many of our members do perceive a chink of light at the end of the tunnel,” said Mr Pettigrew.