Final quarter 2023 survey of UK engineering services
The latest quarterly survey of the UK engineering services sector, backed by leading trade bodies ECA, BESA, SELECT and SNIPEF, reveals that electrotechnical businesses are feeling the effects of the economic slowdown and a shortage of skilled workers, despite high activity and growing order books.
While 2 in 5 survey respondents (40%) said their business’ turnover increased in the final quarter of 2023, A third (34%) say staff shortages are the biggest threat to their business and predicted business growth to stagnate in 2024.
The survey also reveals that most business owners in the sector continue to grapple with high prices and slow payment times. Nearly two thirds (62%) of respondents said commercial clients and main contractors took 31 to 60 days to pay for work, and 15% said this could take 61 to 90 days.
Half (47%) of respondents said public sector clients can take 31 to 60 days to pay. One in 10 (9%) said they can take 61 to 90 days.
Three in 5 (60%) respondents said between 1 and 10% of their turnover is currently being held in retentions.
The findings underscore ECA’s recent work to make payment fairer for contractors. Following consistent pressure from ECA over the past two years, draft legislation to amend the Reporting on Payment Practices and Performance Regulations has now been laid before Parliament for approval.
As well as extending the Regulations until 6 April 2031 – a key ECA ask – the draft legislation confirms that large companies will be required to report on several new metrics from 1 January 2025.
Meanwhile, research by the CBI has shown that the UK green economy far outperformed other sectors in 2023, growing by 9% to around £74bn. ECA works closely with its Members, industry partners and Government to raise the profile of electrical contractor in the transition to Net Zero Carbon and believes this is key to returning the wider construction industry to growth.
This article originally appeared on the ECA website on 24 February 2024. ECA’s Legal & Business team provides support and advice relating to key aspects of contractual business matters in both commercial and domestic settings. From pre-qualification, tendering, contract reviews, to conditions of payment, ECA provides guidance for its Members with templates, guides and a dedicated helpline. Learn more here.
--ECA
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