The president of the Building & Engineering Services Association (B&ES), Bruce Bisset, reminded industry colleagues in the USA that, traditionally, more firms go to the wall during a recovery than fail in the depths of a recession.
Speaking at the annual convention of the Mechanical Contractors’ Association of America (MCAA) in Scottsdale, Arizona, Mr Bisset told his international audience that the reason lay in the fact that an upturn in construction activity tended to occur at a relatively late stage in the overall economic recovery cycle – and that the great bulk of building engineering services work was focused on a similarly late stage in the construction process itself.
“This means that the cost of labour and materials will already have begun to rise long before the start of a building engineering services project – while client expectations will continue to hold down prices and keep margins tight,” said the president.
He added that taking advantage of opportunities for growth was likely to require “an investment in people, assets, equipment and business infrastructure” – but that, while turnover might have improved, cash flow could become overstretched, to the extent that any unforeseen circumstance could lead to collapse.
Mr Bisset also reported that the findings of the most recent state of trade survey carried out among B&ES members had indicated that business opportunities had increased in the second half of 2013 – with more firms acknowledging a rise in both orders and enquiries compared with the previous six months, and half of respondents reporting a rise in their turnover levels.
A measure of optimism regarding future prospects was also seen to have consolidated – while the number of firms recruiting apprentices and trainees grew modestly but significantly during the period.