Contractors see rise in workload and turnover

UK: Despite a modest slowdown, building service contractors are continuing to report increases in workload and turnover in the UK.

The latest state of trade survey conducted amongst members of the Building & Engineering Services Association reveals a positive “net optimism measure” of +39%, some way behind the +49% recorded for the first six months of 2014, but ahead of the +35% reported for the same period in 2013.

Regionally, the percentage of respondents who felt more optimistic about their future prospects ranged from +28% in London and the South East to +80% in Wales.

During that latest period surveyed, tender prices remained largely static, while labour costs continued to rise – as did materials costs, although at a slower rate than previously.

The increased turnover was experienced across all sizes of business and specialisms, an experience which was also spread fairly evenly across the UK, with the North West of England reporting the greatest improvement.

In terms of employment levels, just over a third claimed to be employing more people than they were six months ago, while over half of respondents reported no change in their direct employment levels.

Predictably, late payment, poor margins, increases in labour and materials costs and skills shortages were cited as the principal factors adversely affecting business growth.

More surprisingly, members’ engagement with building information modelling (BIM) had fallen since the previous survey – with only 26% of respondents handling projects that involved BIM, down from 35% last time.

Commenting on the research findings, B&ES president Andy Sneyd acknowledged that – while far from generating doom and gloom – they painted a slightly less bright picture than might have been expected.

“Certainly, anecdotal evidence provided by my fellow members in recent times has given the impression that the upturn in UK construction is rather more sustained than these figures suggest,” said the president.

But he added that conditions were evidently improving – albeit at a slower rate than previously – and there remained every reason to believe that a robust recovery was on its way.