Specialist sector continues to struggle

Specialist contractors are continuing to suffer in the face of tough trading conditions as the industry enters the difficult winter period, according to the latest National Specialist Contractors Council (NSCC) State of Trade Survey.
Results for the third quarter of 2012 show a significant fall in the number of orders as the predicted knock on effect from the low number of enquiries received in the previous quarter was realised. Forty four per cent of respondents reported a decrease in orders this quarter, up from 32 per cent last quarter.

Twenty nine per cent of specialist contractors are anticipating a decrease in workload in the next quarter with just 11 per cent considering any business expansion over the same period, down from 27 per cent last quarter.

The NSCC said: 'Whilst this is not unexpected at this time of year as the industry prepares to shut down for the Christmas period, it does support the disappointing figures from the Office of National Statistics (ONS) which showed that construction output contracted by 2.5 per cent in the third quarter of 2012 even though the economy as a whole grew by 1 per cent.

'The medium term outlook into 2013 appears to be more positive with 35 per cent of Specialist Contractors expecting an increase in workload and 27 per cent looking to expand their businesses over the next 12 months.'

Late payment is still the most important issue affecting specialist contractors and the situation traditionally worsens at this time of year as a number of contractors refuse to pay their supply chains in December.

The NSCC said: 'Specialist contractors should always check the contract payment schedule to ensure a December payment is included and then take action if payment is withheld. The good news is that payment practices are improving in the public sector with the number of specialist contractors receiving payment within 30 days on all their public sector projects increasing by 15 per cent since the Government made 30-day payment a contractual requirement on central Government contracts in December 2010.'

NSCC chief executive Suzannah Nichol MBE added: 'This time of year is often a struggle for the industry as work tails off in the run up to Christmas but the next few months look set to be particularly tough. We are hopeful the recommendations for a national growth strategy outlined in the recent Heseltine Report will help to unlock work in the construction sector and NSCC will continue to provide its members with the guidance and support they need.'

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8 November 2012


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