The latest quarterly Building Engineering Business Survey (BEBS) has suggested that a majority of electrotechnical and engineering services businesses in the UK are preparing for potential project delays next year, raising concerns about cash flow pressures.
According to the survey, nearly two-thirds (63%) of respondents expect delays, while almost a quarter (23%) believe their overall performance will have worsened by the end of this year – a figure up by 7% since the previous survey in August 2024.
The BEBS, conducted by ECA in partnership with BESA, SELECT, and SNIPEF, and sponsored by Scolmore, highlights broader anxiety within the industry. While there is some optimism about workforce growth, with 16% of firms expecting to hire more direct employees in 2025, the same proportion foresee a decline in apprentice numbers amid uncertain trading conditions and predicted higher costs.
Rob Driscoll, ECA Director of Legal and Business, commented, “Whilst staff shortages remain a concern, in 2025 we may see a big impact from delays to projects, which invariably leads to claims and disputes over the cost of completion and final payments.
“In a market where SMEs are paid in arrears as projects progress, business owners should focus on their resilience and ability to withstand cash flow turbulence given the propensity of clients to store disputes up until the resolution of the final account.”
The survey suggests mixed sentiment among respondents. Some point to long-standing challenges in recruiting skilled workers, with nearly two in five (36%) businesses reporting vacancies. Many firms have struggled to fill these positions due to inadequate knowledge or skills (49%), high pay expectations (46%), and insufficient qualifications (40%).
Andrew Eldred, ECA Chief Operating Officer, added, “Businesses are facing conflicting pressures. On the one hand, business leaders are less confident about the future. On the other, long-standing concerns about workforce availability and capability remain.
“Effective dialogue and collaboration between industry, national and regional governments are more necessary than ever to sustain employer investment in skills development through uncertain times. Achievement of key policy missions such as clean energy, housing and good jobs will depend on it.”
Payment practices remain a point of tension. About half of public sector clients reportedly settle beyond 30 days, with 10% taking over 60 days. In the private sector, the proportion of late payers is even higher, and over 40% of respondents indicated that between 2.5% and 10% of their turnover is currently tied up in retentions.