The latest quarterly survey of the UK engineering services sector, backed by trade bodies ECA, BESA, SELECT and SNIPEF, has revealed that electrotechnical businesses are feeling the effects of the economic slowdown and a shortage of skilled workers, despite high activity and growing order books.

While two in five survey respondents (40%) said their business’ turnover increased in the final quarter of 2023, a third (34%) said staff shortages are the biggest threat to their business and predicted business growth to stagnate in 2024.

The survey also revealed that most business owners in the sector continue to grapple with high prices and slow payment times. Nearly two thirds (62%) of respondents said commercial clients and main contractors took 31 to 60 days to pay for work, and 15% said this could take 61 to 90 days.

Half (47%) of respondents said public sector clients can take 31 to 60 days to pay. One in 10 (9%) said they can take 61 to 90 days.

Three in five (60%) respondents said between 1 and 10% of their turnover is currently being held in retentions.

Rob Driscoll, ECA Director of Legal and Business, said: “In light of the wider economic slowdown, these latest survey figures are far from surprising. However, they offer some vindication for the hard work ECA has been doing to give electrotechnical and engineering services contractors a voice, and the opportunity to play their part in the nation’s economic recovery.

“While the outlook for the sector is pessimistic for the rest of 2024, there are signs that the economy could turn a corner by 2025 and the sector could return to growth.”

For related articles, click here