The latest sector-wide Building Engineering Business Survey shows that sector growth remained steady in the third quarter of 2019.
The survey, which included data from leading industry trade bodies ECA, BESA, SELECT and SNIPEF, found that close to eight out of ten businesses (79 per cent) reported their turnover had increased or stayed the same compared to the previous quarter.
The commercial outlook for Q4 is broadly similar to the previous quarter, although slightly more businesses (25 per cent) believe their turnover will decrease.
Predictions under a ‘no-deal’ Brexit are for delays and complications on availability of materials and labour which could cause, at least, short term uncertainty over price and availability of materials and labour, which according to the survey have been steadily rising.
ECA director of legal and business, Rob Driscoll, said: “With ongoing uncertainty over Brexit exacerbated by the upcoming general election, along with warnings of one of the harshest winters on record this year, coupled with wider economic indicators of a slow-down, it is no surprise that businesses are somewhat sceptical about turnover in the coming period. We know that our sector sits at the back of the economy so there is a time delay before front-end economic slow-down hits us giving us a gloomy outlook in the face of a current ‘no-deal’ Brexit scenario.”
The cost of materials continued to rise in Q3, as reported by nearly two thirds (60 per cent) of respondents. However, although the cost of labour continues to rise, half of respondents (51 per cent) say this has not changed since Q2.
Payment terms remain a challenge for businesses in the sector. Close to six in ten respondents (59 per cent) said that, in Q3, between one and 10 per cent of their turnover was tied up in retentions, which is slightly up on Q2.
For public sector work, 59 per cent are paid later than 30 days, and almost one in ten (eight per cent) are paid after more than 60 days. This comes despite around half of public sector clients stating that they insert under-30-day payment clauses in their contracts.
The survey received 431 responses from companies across the multi-billion-pound industry, mainly regarding their performance in Q3 2019 (1 July to 30 September 2019), and expectations for Q4 2019.
