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Early signs of improvement for specialist sector

Specialist contractors are seeing an increase in activity, according to the latest NSCC State of Trade Survey.

44 per cent of respondents reported a growth in orders in the second quarter of 2012, an increase of 14 per cent over the last two quarters.

With 61 per cent now working at over 75 per cent capacity, it suggests a gradual recovery could be on the horizon, which is encouraging news in the face of the figures reported by the Office of National Statistics last month showing that construction output had fallen by 5.2 per cent.

There is continued short-term optimism in the specialist sector with 40 per cent of respondents expecting an increase in workload, up from 30 per cent in the previous quarter, and 27 per cent looking to expand their businesses over the next three months.

A member of the Painting and Decorating Association (PDA) confirmed that “there is business out there but everyone is very careful in what they are spending”. The longer term remains uncertain with the majority of specialist contractors still planning less than three months ahead.

32 per cent also reported a decrease in enquiries this quarter, which is likely to have an impact on the number of orders received in the next quarter and may undermine the recent improvement.

Following the government’s decision in December 2010 to make 30-day payment throughout the supply chain a contractual requirement on central government contracts, 44 per cent of Specialist Contractors are now receiving payment within 30 days on public sector works, compared to 26 per cent in 2011 Q1.

This is a success of the award-winning NSCC Fair Payment Campaign, which has established 30-day payment terms as the best practice standard within the industry over the last 5 years.

NSCC chief executive Suzannah Nichol MBE said: “The construction sector will have a direct impact on the recovery of the UK economy with every pound invested shown to deliver a return of £2.84.

“This quarter’s results suggest that things could be starting to improve and Government investment is very much needed to help the sector maintain its role as one of the main engines of future economic growth.”

NSCC contributes its findings to the State of Trade Survey published by the Construction Products Association, enabling the experiences of the specialist sector to be compared with the wider industry.