New research from the Electrical Contractors’ Association (ECA) has revealed that firms in the electrical contracting sector continued to struggle in Q3 2012.
The ECA’s Quarterly Business Trends Survey showed that a third (33%) of member companies reported a decrease in turnover in Q3 2012, while nearly half (45%) reported no change on last quarter’s figures.
Businesses with a turnover of up to £200k per year were some of the worst hit, with 42% reporting a decrease in turnover and 44% reporting no change. At the other end of the scale, 52% of businesses with a turnover of £1m to £5m reported no change in revenue, while 26% of businesses with a turnover of £1m to £5m reported a decrease.
ECA members are not optimistic about the final quarter of the year, with only 16 per cent expecting their turnover to improve. Predictions for the next 12 months are equally pessimistic, with 77% of members predicting revenue will stay the same or fall.
Steve Bratt, CEO at the ECA, said, “Life in our sector is still tough, as more and more firms compete for less work, and projects with smaller profit margins. The £5bn investment in infrastructure and the launch of PF2 mentioned in the Autumn Statement will, I hope, lead to a resurgence in the healthcare and education markets – two key areas of income for construction.
“However, we need something which will give the industry a boost now. While investment is very welcome and gratefully received, in order to lay the foundations for a long term recovery, the sector needs a short term shot in the arm. Funding for shovel ready construction projects would provide this and this is something we need to see sooner rather than later.”
Bratt continued, “Looking towards the short term, there are opportunities for the electrical contracting industry within the next 12 months. In early 2013, we will see the launch of the Green Deal and the Renewable Heat Incentive. Both initiatives will provide openings for our sector and the expertise of the people within it. In addition, the repair, maintenance and improvement market has tremendous potential for electrical contractors, because of the ongoing carbon reduction agenda. Work in this sector is often based on client relationships, so this market could be a lucrative source of repeat business for companies who diversify into it.”
