M&E contractors hoping to ‘hold on’ through covid crisis

Grant Prior 11 months ago
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The latest engineering services sector survey highlights the devastating impact of the coronavirus crisis across the industry.

But contractors remain resilient with 15% even expecting their business to expand by the end of the year.

Predictably nearly three-quarters of firms expect their turnover to fall in the second quarter of 2020, compared to the first quarter.

While looking further ahead to the third quarter of 2020, a similar number of businesses expect turnover to drop with 23% expecting revenue to at least halve.

The figures are the biggest anticipated drop in turnover since the sector business survey began over a decade ago.

One in 20 respondents feared that by the end of Q3 this year their business ‘may not be viable’, while a further 10% said they were unsure about viability.

But 15 per cent of people said they expect their businesses to grow by the end of Q3, with a further 70% cent expecting to continue with turnover either reducing or holding on.

ECA CEO Steve Bratt said: “Although construction has continued to operate through the crisis, at least in part, it is no surprise to see the reductions in turnover and the challenges to business in remaining viable.

“However, the figures also demonstrate our sectors resilience and importance and we shouldn’t forget that in the medium and longer term many of the challenges we face as a nation will provide growth opportunities.”

ECA director of legal and business Rob Driscoll added: “The sector’s unique position within both construction and facilities management has always demonstrated a resilient ability to bounce back.”

In terms of the impact on jobs at the end of Q3, half of businesses expect to have the broadly same number of direct employees while 67% expect wages to be broadly the same although 17% expect wages to fall.

BESA Director of Legal & Commercial Debbie Petford said: “These statistics show the unprecedented damage that this crisis has inflicted on our sector. Despite so many businesses struggling to survive through no fault of their own, it is encouraging to see how resilient the vast majority of the sector is.”

“Government have demonstrated its continued support for businesses throughout this crisis and this should be complimented by industry playing its part too.

“It is critical businesses work together in a collaborative spirit with their supply chain, and it is encouraging to see these principles reflected in the new CLC Contractual Best Practice Guidance and the RICS Conflict Avoidance Pledge, proving the industry can work together in these challenging times.”

SELECT Managing Director Alan Wilson said: “The expected fall in turnover is worrying for the sector, which is why it’s vital for us all to work together during return, restart and beyond.

“We all have a part to play to ensure cashflow is maintained to help those most severely impacted by lockdown.”

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