ECA | Engineering Services Sector Ends 2016 on High

Building Engineering Business Survey findings come despite rising material and labour costs, and late payment issues.

Over three in four (78%) engineering services firms say turnover increased or remained steady during the final quarter of 2016, according to new findings within the sector-wide ‘Building Engineering Business Survey’, sponsored by Scolmore.

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, over 6 in 10 (61%) engineering services firms say their material costs increased during the final quarter of 2016. Over the same period, almost 4 in 10 survey respondents (39%) said that labour costs had increased. Furthermore, almost 6 in 10 businesses (57%) 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 commented: “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%) seeing turnover increase.

Looking ahead to the first quarter of 2017, the business outlook is very positive, with almost 9 in 10 businesses (86%) 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.