Industry more confident for Q3

UK: Two-thirds of building services businesses expect turnover to increase or remain the same in Q3, compared with Q2, which saw a sharp drop in turnover due to the coronavirus.

According to a new engineering services sector survey, conducted by BESA, the Electrical Contractors’ Association and SELECT, the Scottish electrical contractors’ association, 60% of businesses reported less turnover in Q2 compared to Q1. This was the sharpest drop since the quarterly Building Engineering Business survey began in 2016.

However, this fall in Q2 turnover was not as large as businesses had predicted earlier in the year, during the previous iteration of the survey. Back in April, 74% of respondents had predicted a fall in turnover during Q2.

“The resilience of the sector is evident in these latest figures and we are finding that our members are cautiously positive, despite the end of furlough looming large at the end of October,” said BESA’s director of member services Debbie Petford.

“A key issue going forward will be retaining skilled workers. We already suffer from a skills gap and the threat of redundancies may drive skilled workers out of the industry or discourage trainees entering our sector. The government’s KickStart scheme, the CLC’s Talent Retention Scheme and our own new online learning solution, the BESA Academy are key initiatives which will help.”

The use of agency workers and subcontractors continued to fall in line with a downward trend observed throughout late 2019 and 2020. Although 9% of businesses said they were using more agency workers and subcontractors than in the previous quarter, 30% of respondents said they were using fewer than before.

Payment issues continue to be a challenge. Despite public sector rules mandating payment within 30 days, only 32% of direct contracts and just 27% of indirect contracts were paid during this timeframe.