ECA warns of uncertain times ahead in construction sector

Figures from the latest Electrical Contractors Association's Member Business Trends Survey indicate the UK construction industry is preparing for a particularly challenging time over the next one to two years.

The most significant change, highlighted in the survey, is a lowering in confidence, with just under a quarter (24%) of ECA members expecting to see revenue growth over the next 12 months compared to almost 40 per cent last year.

Uncertainty in respect of the next 12 months is greater amongst small and medium sized firms than larger firms. For the first quarter of 2008 the proportion of members reporting a decrease in turnover increased relative to the last quarter of 2007 with a third of members (33 per cent) expecting to see a reduction in revenue over the next 12 months.

This comes as private housing new 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 2008-2010, representing a fall of £3.3bn in the value of output. With these facts in mind, the ECA advises 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."