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Building services firms report market improvements

M&E contractors saw their order and enquiries rise in the second half of last year, according to a survey members of the Building & Engineering Services Association (B&ES).

More firms acknowledged an increase in orders and enquiries compared with six months ago, while half reported a rise in their turnover levels.

Member optimism regarding future prospects also strengthened, while the number of firms recruiting apprentices and trainees rose modestly but significantly during the period.

There were indications that the recovering commercial environment meant that margins had stabilised but increases in labour and materials costs were becoming a cause for concern for 33% and 63% of respondents respectively.

The survey also revealed that levels of both direct employment and the use of agency labour had risen – the former for the first time in the lifetime of the survey – and that these trends were likely to continue during the next six-month period.

Only in the domestic heating sub-sector were market conditions reported to have got worse, with a decline indicated in both order books and enquiries.

B&ES chief executive Roderick Pettigrew said that this was the second successive B&ES survey to have painted a relatively bright picture of prospects across building engineering services and, by implication, the construction industry as a whole.

“Encouragingly, our findings appear to be in line with those of other surveys carried out recently in adjacent sectors, which taken together provide evidence of a sustained, if still modest, process of recovery,” said Mr Pettigrew.

Although issues surrounding late payment and poor margins continued to have an adverse effect on some businesses, Mr Pettigrew considered it significant that members were becoming less concerned about client and main contractor insolvency – “yet another positive indicator,” he suggested.

The fourth B&ES survey, covering the period from July to December 2013, was undertaken in January by independent consultant Lychgate Projects. A full report on its findings can be found on the B&ES website at www.b-es.org.

 

 

 

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