ECA survey predicts rocky road

Figures from the latest ECA member business trends survey indicate that the m&e sector looks set for a challenging time over the next year.

The most significant change highlighted is a lowering in confidence, with 33% of ECA members expecting to see a reduction in revenue over the next 12 months. Only 24% of firms expect to see revenue growth in the year ahead, compared to almost 40% last year.

Uncertainty with respects to the next 12 months is greatest amongst SMEs.

This comes as new private housing starts are forecast to drop to around 150 000 in 2008 as a result of falling house prices and limited mortgage availability.

Commercial building is also forecast to drop 14% over 2008-10, representing a fall of £3.3 bn in the value of output.

With these facts in mind, the ECA advises that now may be the time for companies to diversify into specialist areas in order to widen opportunities.

David Pollock, ECA Group CEO, said: “Despite these difficult times there are still many areas within our industry where businesses can grow and prosper.

“New technologies are emerging at an increasing rate and the demand for intelligent solutions provides firms working within our industry with substantial opportunities.

“Diversifying into specialist areas could ultimately widen the scope for work and offer better prospects.”

The results are published as the latest Plimsoll market analysis predicts yet more bad news for the UK’s m&e firms.

Plimsoll’s latest findings show that up to 4700 jobs could be lost as the m&e contracting industry consolidates over the next 12 months.

Meanwhile, the construction industry has hit an 18-year low as prices rise and demand cools.

The dramatic fall is due to the credit crunch, combined with the rising cost of raw materials and energy.

Market forecaster Experian’s index of national construction activity fell to 40 during May. Meanwhile, the orders index slipped below 50 for the first time in over a decade.