Survey reveals a further fall
Almost one in three firms have seen a fall in their workload during the first six months of 2012, although there are some signs that the rate of decline is slowing down, according to a state of trade survey carried out among members of B&ES (the Building & Engineering Services Association).
The downturn has been most evident in the North East of England, Yorkshire and Scotland, and in the residential heating sector, the research indicates.
A total of 50% of respondents reported that tender prices are lower than they were six months ago and that, while labour costs had remained more or less static, there had been a significant increase in the cost of materials.
Unsurprisingly, given the continuing low levels of business, direct employment has fallen across the board, and skills shortages do not appear to be of great concern to the majority of respondents – 61% of whom have not taken on an apprentice or trainee in the past year. However, on a more optimistic note, the findings indicate an expected increase in direct employment levels during the second six months of the year, along with a net increase in investment in training.
Some 70% of respondents confirmed that they had some involvement in the installation of renewable technologies during the period with air-source heat pumps being the most popular technology, followed by solar thermal.
In this context, members acknowledged the likely further growth in demand for such technologies over the next few years and the consequent need to provide appropriate training and to attract new blood into the industry.
Amongst the Association’s specialists, members of the Service & Facilities Group have coped the best during the recession, with members of both the Ductwork Group and the Heating & Plumbing Services Group having suffered most deeply.
Members believe that the major factors adversely affecting business growth are late payment, tight margins and insolvency further up the contractual chain, while increased investment by the public sector was cited as the key driver for growth.