Members of the Building & Engineering Services Association (B&ES) saw a less rapid drop during the second half of 2012 than in the first half, but falling levels of orders and enquiries indicate that business performance is likely to worsen in the year ahead, according to the association's second independent state of trade survey.
The survey was conducted in January this year across the B&ES membership and covers the six months from July to December 2012.
Overall, member confidence was found to have fallen, with 10% fewer respondents than six months ago expecting the commercial environment to improve in the short term.
In total, 51% of respondents reported a further fall in tender prices, 29% a continuing decline in direct employment and the same percentage a reduction in the use of agency labour. Additional pressure from the rising costs of materials was cited by 62% of those surveyed and the continuing proliferation of pre-qualification regimes by 34%.
Geographically, London, Yorkshire and the North East experienced the steepest decline, as did companies operating in the domestic and service and facilities sectors. However, members with a turnover of £5m-plus appear to have been less adversely affected than their smaller competitors.
The engagement of apprentices and trainees was also seen to have fallen during the period of the research, although a small majority of respondents expected to make a greater investment in vocational training over the next six months, albeit from a low base.
Surprisingly, only 63% of respondents confirmed that they had had some involvement in the installation of renewable technologies during the period. This is down from 70% six months ago. Air-source and air-to-air heat pumps continue to be the most popular technologies, followed by solar thermal.
Meanwhile, B&ES members believe that the major factors adversely affecting business growth continue to lie in late payment, ever-tighter profit margins and insolvency further up the contractual chain.
The B&ES state of trade survey was the second to be conducted online by independent research organisation Lychgate Projects. Just over 200 B&ES members took part.
A further state of trade survey covering the first half of 2013 has been commissioned by B&ES and will be carried out in July. B&ES intends to repeat the exercise every six months after that.
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http://www.b-es.org/
