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State of trade survey confirms continuing market improvement

Business is continuing to improve for members of the Building & Engineering Services Association (B&ES), with increased order books and enquiries being reported more or less across the board.

According to the latest state of trade research carried out among the membership, which covers the period from January to June 2014, also reveals growing confidence in future commercial prospects.

56% of respondents feel positive about future prospects, resulting in the “net optimism measure” rising from +35% to +49% compared with six months ago.

Improved trading conditions are reflected by a welcome stabilisation in tender prices, but also by an increase in labour costs as skills shortages begin to bite once again.

Rises in materials costs, however, were less evident than at the start of the year.

In fact, 58% of respondents reported an increase in their order books – twice as many as last time – and almost half had experienced higher enquiry levels.

Geographically, more companies in East Anglia, East Midlands and the South West of England reported improvement in business levels than in other regions, with only firms in Northern Ireland recording a decline in enquiries and recruitment, along with static
order books and turnover levels.

In terms of market sectors, firms active in service and facilities and industrial/ commercial installation were able to see the biggest improvement, although business also grew in the domestic sector, where a decline in both order books and enquiries was picked up by the previous survey.

As many as 38% of respondents were able to confirm that they were employing more people than six months ago, while 44% expected to recruit during the second half of 2014.

The use of agency labour had also risen significantly – as had the number of firms hiring apprentices or trainees, which showed an increase of more than a fifth.

Chief executive Roderick Pettigrew pointed out that this was the third successive B&ES survey to have painted a brightening picture for building engineering services – and, by implication, for the construction industry as a whole.

“With enquiries, order books and turnover all on an upward trend, our members are beginning to credit that a sustained and increasingly robust recovery may genuinely be on its way,” said Mr Pettigrew – adding that the reported stabilisation of tender prices augured well for future profitability.

“I am also pleased to note that our members are recruiting again – most significantly at apprentice and trainee level – especially in the light of the skills shortages that are already beginning to appear in many areas of the workforce.”

He went on to note the growth in the residential market – which had been slower to show than in other sectors – and expressed the hope that prospects in Northern Ireland would soon catch up with those in the rest of the UK.

A total of 16% of B&ES member firms took part in the fifth B&ES state of trade survey – up from 13% last time.

The research was undertaken in July of this year by independent consultant Lychgate Projects, and a full report of the findings can be found on the B&ES website at www.b-es.org.

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