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B&ES president warns of recovery pitfalls

Bruce Bisset, president of the Building & Engineering Services Association (B&ES), has 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.

Bruce Bisset, president of the Building & Engineering Services Association (B&ES), has 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.

 

On a brighter note, Mr Bisset 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.

“Encouragingly, our findings appear to be in line with those of other surveys carried out recently in adjacent industry sectors – which, taken together, provide evidence of a sustained, if still modest, process of recovery, the president concluded.

The MCAA convention also provided an opportunity for a meeting of the International Alliance of Mechanical Contractors Association (IAMCA).

Membership of IAMCA – of which B&ES chief executive Roderick Pettigrew has been elected secretary – comprises top-level representation from Australia and Canada as well as the UK and USA, and promotes discussion of and action on key sectoral issues in a global context. 

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