NEWS

Confidence grows in the industry

Figures from the ECA’s fourth quarterly member business survey reveal growing confidence in the industry, with members continuing to report a strong upturn in turnover during the last quarter of 2006.

The survey shows the turnover increase in the fourth quarter of 2006 was almost identical to the previous quarter with one third (33 per cent) of respondents reporting a higher turnover to quarter three. More than one sixth (18 per cent) however, report a decline in turnover during this period. The net balance of those seeing growth, less those seeing a decline, remained at the same quarterly level of 16 per cent. This figure is well above the historical average.

Expectations for the next quarter (first quarter 2007) remain positive; just under a third of respondents (29 per cent) expect to see sustained growth in terms of turnover and only 14 per cent foresee a decline. The figures however, reveal differences between size of contractor, with those above £1m annual turnover considerably more optimistic than smaller companies. Greater London is particularly optimistic about the next quarter, while members in the Midlands anticipate a static situation in the first three months of 2007.

The survey highlights a continued optimism for 2007 as a whole, with 38 pre cent expecting a year-on-year increase in business, and only 12 per cent expecting a decline. This equals the previous best quarterly forecast in the last five years (third quarter 2004).

The survey reveals the strength in enquiries in the final quarter of 2006, with 32 per cent experiencing an increase, 14 per cent more than those reporting a decrease. Enquiry levels are anticipated to be similarly good in the first quarter of 2007, with 29 per cent predicting an increase and 14 per cent a decrease. Members are seeing increased business from the public sector, as well as from commercial and domestic areas of work. The most noticeable regional profile is seen in the increased level of enquiries in Greater London and consistent high level of optimism there for both the next quarter and the next twelve months.

Director of the ECA, David Pollock says: "Enquiries are a good indicator as to the health of the industry; the results from the survey bode well for 2007. Despite the optimism however, the survey highlights key areas of concern, such as the pressure on margins, labour shortages and some concern that the economy is heading downwards in the longer term."

Editor’s notes

The ECA’s Quarterly Member Business Survey is based on a questionnaire mailed to the ECA’s 2,800 members at the end of December 2006. This report is based almost 437 replies received by 23rd January 2007. The full report will be available on request.

The 12 ECA regions are combined into the following Areas: North (includes North East, North West and Ireland); Midlands & East (includes East Midlands, West Midlands and East); West (includes South West, South Wales and West); South East (includes South East and Central South); and Greater London.