According to the latest state of trade survey conducted by the Building & Engineering Services Association (B&ES), business is continuing to improve for its members, with increased order books and enquiries being reported virtually across the board.

The research, which covers the period from January to June 2014, also reveals growing confidence in future commercial prospects. 56% of respondents said they felt 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 emerge again. However, rises in materials costs were less evident than at the start of the year.

More than half (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.

The biggest improvement was seen by companies that are active in service and facilities and industrial/ commercial installation. Business also grew in the domestic sector, where a decline in both order books and enquiries was noted in 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.

B&ES chief executive Roderick Pettigrew (pictured) said this is the third successive survey to have revealed a more positive outlook for building engineering services and, by implication, for the construction industry as a whole.

He said: “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.

“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.

Overall 16% of B&ES member firms took part in its fifth state of trade survey. The research was undertaken in July this year by independent consultant Lychgate Projects. The full report can be viewed by visiting www.b-es.org.