The UK may have already entered a recession, but many electrical firms are more concerned about staff shortages than the slowing economy.
In fact, while the general economy may be slowing and constant reports of layoffs, the electrical sector may not see much of an impact. The latest engineering services sector survey shows that the majority of business owners and decision-makers expect their business performance to improve in the short term towards year-end and beyond.
The latest findings of the quarterly Building Engineering Business Survey, backed by trade bodies ECA, BESA, SELECT and SNIPEF, revealed that 75% of engineering services businesses expect to perform better in Q4 2022 than one year ago, in Q4 2021.
The cost of living crisis and rising inflation also should have little impact on turnover, with 74% of respondents expecting their turnover to stay the same or increase by the end of Q4 this year. In fact, 78% saw their turnover stay the same or increase between April and September (Q2 and Q3) this year, and most seem to expect the trend to continue in the short term.
However, that doesn’t mean the electrical sector expects things to be easy going forward. The survey revealed that firms in the engineering services sector were most concerned about staff shortages, with 51% citing it as their primary or secondary concern. The shortage of electrical skills was a particular concern for 52% of firms.
Rob Driscoll, ECA Director of Legal and Business, noted, “Today’s engineering services landscape is more complex than ever. The major increase in energy prices has significantly increased demand for certain services, but residual concerns remain over material costs for all products requiring electronics.
“Continued labour shortages and growing worries about delivering fixed priced contracts continue to keep business owners up at night. This could indicate a near future where order books appear healthy, but work is delivered at negative margins. Contractors should be cautious in their optimism, as the effects of economic decline in 2023 will take some time to filter through to the engineering services sector and could be felt later on.
“Wise businesses have been using the CLC Product Availability Statements to collaborate and tackle inflation in order to build on long-term sustainable delivery for clients.”
Debbie Petford, BESA Director of Legal and Commercial, added, “Our latest survey demonstrates that contractors are facing an unprecedented variety of challenges, but also that they are doing an admirable job of coping with them and turning several into growth opportunities.
“We are all having to tussle with the cost-of-living crisis, but our industry has a big role to play in long-term solutions, particularly in improving energy efficiency and lifecycle performance of buildings. This is clearly reflected in the findings of the survey which point towards significant growth prospects for building engineering firms in the medium to long term.”
