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, compared with almost 40% last year. Uncertainty is greatest among SMEs.

The survey 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% during 2008-2010, representing a fall of £3.3 bn in value of output.

The ECA advises that firms should now diversify into specialist areas in order to increase business.

David Pollock, ECA group chief executive officer, 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 latest Plimsoll market analysis predicts yet more bad news for the UK’s m&e firms.

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

Construction activity has hit its lowest level since records began in 1997, according to a survey by the Chartered Institute of Purchasing and Supply (CIPS).

The Purchasing Managers’ Index dropped to 36.7 last month, compared with June’s figure of 38.8. A figure of 50 represents a ‘no change’ mark.

With workloads lower and cost pressures remaining intense, jobs in the sector were shed at the fastest rate in more than 11 years.

Roy Ayliffe, director of professional practice at the CIPS, said: “Housing was again the sick man of the industry, as levels of activity plunged to a record low.”

Commercial activity also declined at a record pace, and there was a marked fall in civil engineering.

Ayliffe commented: “July marked an end to constructors’ optimism about recovery, as spirits were knocked by the persistent and rapid decline in new business and activity.”