Engineering Services Sector Ended 2016 on a Positive Note

According to a new ‘Building Engineering Business Survey’ survey sponsored by Scolmore, more than three out of four (78 per cent) engineering services firms say turnover increased or remained steady during the final quarter of 2016.

The survey is now being run in partnership by the ECA, the Building Engineering Services Association (BESA), and Scottish electrical trade body SELECT. It had 529 responses from across the building engineering services sector in January.

However, more than six in 10 (61 per cent) engineering services firms say their material costs increased during the final quarter of 2016. Over the same period, almost four in 10 survey respondents (39 per cent) said that labour costs had increased. Furthermore, almost six in 10 businesses (57 per cent) said that they were not being paid within 30 days for public sector work, in breach of legislation.

ECA ceo Steve Bratt and BESA chief executive Paul McLaughlin said: “These new survey findings show that the engineering services sector is powering forward, despite challenges from rising material and labour costs. Our sector is extremely resilient and technological advances are continually opening up new business opportunities.”

SELECT managing director Newell McGuiness added: “This is the first time that SELECT members have participated in the business survey and we are encouraged at the confidence in future workload opportunities. However, this is tempered a little by the increase in material costs, which are beginning to be felt and the on-going issue of extended payment periods, particularly in the private commercial sector”.

Businesses of all sizes had a strong final quarter, with over three-quarters of micro, small, medium and large businesses all seeing turnover rise or remain constant. Very large businesses (turnover over £20m) had the strongest quarter, with over half (54 per cent) seeing turnover increase.

For the first quarter of 2017, the business outlook is very positive, with almost nine in 10 businesses (86 per cent) expecting their turnover to increase or stay the same.

The engineering services sector covers a broad range of work including electrical, mechanical, renewables, heating and ventilating, datacomms, and fire and security systems.