ECA survey highlights concerns over future outlook

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Recent research from the Electrical Contractors' Association (ECA) shows, despite the financial situation of the small majority of member firms having remained stable throughout the second quarter of 2010, there was less optimism about the future than there had been at the end of 2009.

The second-quarter findings of the association's Member Business Trends Survey showed fewer businesses (38%, down from 40%) reporting a loss in turnover and a very slight gain (1%) in the number of firms reporting an increase in turnover, to 21%. 40% of members, however, said they had seen no change in their turnover. This an increase of 4% compared to Q1.

All regions, apart from the South East and Midlands, have returned better than expected figures for Q2 in comparison to the first quarter of 2010. Relatively large businesses, those with an annual turnover of over £5m, continue to experience the biggest gains in financial performance and maintain greater confidence about the future.

Turning to views on the prospects for the next quarter (Q3), these were a touch more optimistic than they were in Q1. ECA's group CEO, David Pollock, commented however, that notwithstanding the fact that a fifth of members expect to make gains in revenue, 43% predict a fall in turnover over the next 12 months and firms have expressed a 12% drop in enquiries since Q1. He said: "I worry about growing pessimism especially in light of recent and expected spending cuts."

The survey highlighted that businesses in the North, as well as those with an annual turnover of less than £200,000, are most concerned about the downturn in business and how this will affect them.

Pollock concluded: "Larger contractors are generally better resourced to weather the current storm, but times are tough for everyone. It is encouraging to see the government taking steps to remove some of the traditional barriers to procurement by posting all public contracts worth more than £10,000 online from this September, and introducing a single pre-qualification questionnaire for all government contracts worth less than £50,000. I hope all businesses including small and medium-sized ones be are able to benefit from additional work streams."