Contractors report increased orders

UK: Building services contractors have reported increased enquiries, orders and turnover in the first six months of this year.

Research carried out among members of the Building & Engineering Services Association (B&ES) for the period from January to June this year, reveals a positive “net optimism measure” of 45%, up from 39% six months ago.

Growth in order levels was experienced by 53% of respondents – compared with 47% in the second half of 2014 – while 41% enjoyed an increase in enquiries and 40% an increase in turnover.

Encouragingly, an improvement in tender prices was also reported; for the first time since the six-monthly B&ES survey was introduced in 2012, more members reported a rise than had experienced a decline.

Labour and material costs were both seen to increase – while 36% of firms claimed to be employing more direct labour than six months ago, and 40% expected workforce levels to increase further during the remainder of 2015. There was also a rise in the number of members taking on apprentices and making use of agency personnel.

However, a range of concerns continue to temper members’ optimism. These include skills shortages, zero and ultra-low margins, over-long tender lists and the prevalence of late payment.

Commenting on the research findings, B&ES chief executive Paul McLaughlin said that they confirmed the anecdotal evidence already garnered from members that the construction industry and the building engineering services sector continued to enjoy a sustained, if still sometimes tentative, recovery.

“I am also pleased that firms are responding to the challenge posed by skills and labour shortages by stepping up their training activity so as to take full advantage of the commercial opportunities that are available to them.

“The optimism which is clearly spreading throughout the membership augurs well for our sector as a whole,’” Mr McLaughlin concluded.