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Building Engineering Business Survey highlights tough start to 2018

An increased number of surveyed engineering companies saw turnover fall during first quarter of 2018 on back of ongoing pressures and unique challenges such as the Carillion collapse and heavy snow

Over a quarter of 316 engineering services firms surveyed on their financial performance have reported a fall in turnover during the first quarter of 2018, the highest falls of its kind in two years.  The findings reflect the impact of adverse weather conditions and the fall of Carillion earlier this year.

The Building Engineering Business Survey, a poll sponsored by Scolmore and supported by associations such as the ECA, BESA and the Scottish and Northern Ireland Plumbing Employers’ Federation (SNIPEF), concluded that the second quarter of 2018 was likely to be more positive for industry.

86 per cent of the survey group expected their turnover to increase or at least match the previous three-month period.

Building services group BESA noted that the findings identified a number of ongoing issues hampering business, such as poor payment practices that had resulted in 60 per cent of commercial work undertake during the period being paid for more than 30 days after completion.

Weather such as heavy snowfall during the first quarter of 2018 was also cited as a contributing factor to higher levels of reduced income, with 34 per cent of the survey group claiming adverse weather had an impact on their productivity.

BESA legal head Debbie Petford said that the collapse of construction giant Carillion, the heavy snowfall and the ongoing fallout from the Grenfell Tower fire over the last year had added to pressures facing the construction supply chain.

She said, “The construction industry is facing very tough times, with greater demands to complete projects faster, cheaper and to higher standards.”

SNIPEF chief executive Fiona Hodgson said that despite hope that the industry would see an ongoing improvement in volumes of work, significant uncertainty remained.

She added, “The adverse weather conditions produced additional work for some of our members with an increase in call-outs for boiler breakdowns and servicing but others faced a lack of work as a result of site closures. In addition to the continued rise in cost of materials, our members are now facing increased labour costs associated with a shortage of suitably qualified operatives.”

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