18th September 2020

M&E firms now optimistic after worst fears not realised

Specialist mechanical and electrical contractors are now far more optimistic about work prospects head.

An in-depth trade survey found that firms’ worst fears were not realised about the impact of Covid-19.

The vast majority are now sounding a mood of optimism even with furlough drawing to an end in October.

The latest engineering services sector survey shows that two thirds of businesses (67 per cent) expect their turnover to increase or remain the same in Q3 of 2020, compared with Q2, when there was a sharp drop in turnover due to the coronavirus crisis.

But, this fall in Q2 turnover was not as large as businesses had feared back in April.

Electrical Contractors Association CEO Steve Bratt said:“The sharp downturn in turnover over Q2 was keenly felt across industry.

“The picture that is now emerging is one of a resilient sector that braced for impact in the spring and is so far weathering the storm while remaining cautiously optimistic about the future.”

BESA Director of Member Services Debbie Petford said: The resilience of the sector is evident in these latest figures and we are finding that our members are cautiously positive, despite the end of furlough looming large at the end of October.

“A key issue going forward will be retaining skilled workers.

“We already suffer from a skills gap and the threat of redundancies may drive skilled workers out of the industry or discourage trainees entering our sector. The government’s KickStart scheme, the CLC’s Talent Retention Scheme and our own new online learning solution, the BESA Academy are key initiatives which will help.”

The use of agency workers and subcontractors continues to fall, in line with a downward trend observed throughout late 2019 and 2020.

Although 9% of businesses said they were using more agency workers and subcontractors than in the previous quarter, 30% of respondents said they were using fewer than before.

Payment issues continue to be a challenge for businesses. Despite public sector rules mandating payment within 30 days, just a one-third of direct contracts (32%) and just 27% of indirect contracts were paid during this timeframe.


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