Electrical businesses brace for project delays in 2025

The latest quarterly Building Engineering Business Survey (BEBS) has revealed that close to two thirds (63%) of electrotechnical and engineering services businesses are worried about delays to projects and the impact this can have on cashflow.

The survey, conducted by ECA in partnership with BESA, SELECT, and SNIPEF and sponsored by Scolmore, also showed that almost a quarter (23%) of respondents expect their business’ performance to have worsened by the end of this year – a figure which has risen by 7% since the last survey, in August 2024.

ECA Director of Legal and business Rob Driscoll said:

“Whilst staff shortages remain a concern, in 2025 we may see a big impact from delays to projects, which invariably leads to claims and disputes over the cost of completion and final payments.

"In a market where SMEs are paid in arrears as projects progress, business owners should focus on their resilience and ability to withstand cashflow turbulence given the propensity of clients to store disputes up until the resolution of the final account.”

The survey suggests optimism about the number of direct employees in the sector, with 16% predicting this will go up in 2025. However, the same proportion of respondents felt the numbers of apprentices would fall in 2025, most likely reflecting the decline in confidence about future trading conditions following the budget announcements of increased costs for 2025.

ECA Chief Operating Officer Andrew Eldred said:

“Businesses are facing conflicting pressures. On the one hand, business leaders are less confident about the future. On the other, long-standing concerns about workforce availability and capability remain.

"Effective dialogue and collaboration between industry, national and regional governments are more necessary than ever to sustain employer investment in skills development through uncertain times. Achievement of key policy missions such as clean energy, housing and good jobs will depend on it.”

The number of respondents reporting vacancies in their businesses rose by 10% to nearly two in five respondents (36%). Trouble filling these vacancies was primarily blamed on a lack of sufficient knowledge or skills (49%), high pay expectations (46%), and a lack of sufficient qualifications (40%).

While most survey respondents felt payment behaviour would not change by the end of Q4 2024, over 20% felt it would deteriorate. Half (49%) said that their public sector clients paid them later than 30 days after completing work, including 10% saying this took over 60 days.

Three quarters (76%) said that their private sector clients paid later than 30 days, including 16% saying this took longer than 60 days. Over 40% of respondents reported that between 2.5-10% of their turnover was currently tied up in retentions.

This article appears on the ECA news and blogsite as "Survey: Electrical businesses brace for project delays in 2025" dated 4 December, 2024.

--ECA

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