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Electrical contractors facing pessimistic 12 months

The outlook for electrical contractors throughout the rest of the year is dim, according to a new survey.

The Electrical Contractors’ Association’s Quarterly Business Trends Survey reveals that 41 per cent of respondents were expecting a fall in turnover for the year. Another 39 per cent were expecting no change.

This is despite a relatively benign final quarter of 2011 where 24 per cent reported an increase in sales, with no change for a further 39 per cent.
Steve Bratt, Group CEO of the ECA said: “We are still feeling the effects of the recession, and consumers and contract clients alike continue to be cautious about spending.

“This is reflected in the demand that members are experiencing. We are hopeful that the announcements made in the Chancellor’s recent budget will have a positive knock-on impact for our members. For example, up-front cash loans that will be made available for construction companies and housebuilders should mean that more schemes can be progressed, and our members can benefit from the increased workload.”

The survey revealed:

- Q4 2011 saw a fall in turnover followed by a more pessimistic outlook for Q1, 2012 as a whole. However, the outlook for the next 12 months is little changed from Q3, and continues to show some very small signs of optimism for an increase in turnover.

- Overall, over 40 per cent of respondents reported that their turnover in the final quarter of 2011 was unchanged - during Q3 2011, 42 per cent had reported no change in turnover.

- Just under a quarter (24 per cent) reported an increase in turnover for the final quarter - a decrease of 2 per cent compared with Q3 2011.

- 37 per cent of the sample reported a decrease in turnover - worse by 5 per cent compared to Q3, 2011.

Regionally, businesses in the North West, West and Greater London saw the greatest increase in turnover for the fourth quarter of 2011, when compared to the third quarter.

They were also the most optimistic regions for both the first quarter of 2012, and the 12 months ahead. The Midlands and the Central South regions expressed the least confidence about the first quarter of 2012.

In the third quarter of 2011, ECA members with turnovers between £200,000 and £1million, were very pessimistic, with 50 per cent anticipating a decrease in turnover for Q4. Despite this, just 34 per cent actually saw a decline, and as a result, businesses of this size are now the most optimistic group for the first quarter of 2012.

The outlook of all other business sizes is less optimistic, with most expecting a decrease in turnover. Those turning over between £1million and £5million have the most pessimistic expectations, with 46 per cent anticipating that their turnover will decrease during the first three months of 2012.

Mr Bratt said: “Whilst the Supreme Court’s decision to quash the Government’s FITs appeal will ease some turmoil, the uncertainty that members are currently experiencing looks set to continue, as The Green Deal remains under a lot of speculation. The ECA is recommending that the Department for Energy and Climate Change (DECC) works to encourage ‘active’ energy saving measures, such as solar photovoltaic (PV) panels and smart heating and lighting controls. This will not only serve to cut costs and carbon emissions for consumers but provide vital opportunities for electrical contractors.”

Readers' comments (1)

  • Energy saving measures must be implemented as the benefits will ultimately negate the upfront costs (Rising Fuel and electricity costs, boost local workforce and skills, CO2 savings)

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