Contractors report market slowdown and increased costs

UK: The building engineering services sector is experiencing a slowdown in growth, along with increased material and labour costs.

The latest sector-wide Building Engineering Business Survey for Q4 2108 has revealed that while 26% of businesses reported increased turnover, another 26% said turnover had fallen compared to the previous quarter. Outlook for the first quarter of 2019 is also subdued with 74% said they expect their turnover to stay the same or fall compared to Q4 2018.

According to the latest market survey by the Building Engineering Services Association (BESA), the Electrical Contractors’ Association (ECA), the Scottish electrical trade body SELECT and the Scottish & Northern Ireland Plumbing Employers Federation (SNIPEF), 61% of companies saw material costs rise in Q4 2018, compared to Q3. Almost half (48%) also reported increased labour costs during the final quarter of 2018.

“The latest forecasts from the CPA [Construction Products Association], which we recently shared with our members, indicate similar findings with a market forecast of just 0.3% growth in 2019 and material prices going up by 5.1%,” said BESA CEO David Frise. 

“The challenge for contractors across the sector is maintaining cash flow in a climate where payment issues still reign,” he added.