Trading conditions in the specialist sector remain tough despite some early signs that things could be starting to improve according to the latest FPDC State of Trade Survey – covering the final quarter of 2012.
More than half of the survey respondents were more optimistic that three months ago, however, the main new business indicators all show little change with.
Payments continue to slow up with nearly 64 per cent of respondents saying that they are slower than 12 months ago. Specialists say that large corporate contractors are generally the slowest.
Nearly three quarters of main contractors are issuing payment notices late and that just under 70 per cent of main contractors are failing to release retentions on time. Main contractors appear to be holding onto retentions until they receive practical completion for a whole site.
Enquiries received saw little change, 30 per cent reporting an increase compared with 28 per cent in Q3. Order were however more positive as 36 per cent saw an increase in orders in the fourth quarter of 2012, compared with only 4.8 per cent in Q3.
Margins are not moving. Some 94 per cent of respondents said margins were either decreasing or showing no change. One specialist said: “Margins are continuing to be squeezed by poor quality contractors offering services at below realistic prices to pick up turnover, supporting clients’ ill-conceived belief in the true cost of such work.”
Members told FPDC that they needed help with difficult payers and that the over bureaucratic pre-qualification process continues to be a concern. Contractors say that the process needs to be simplified as there is still a significant amount of duplication.
——–FPDC Q4 2012—————–
Q1 Compared to three months ago orders
Increasing 25.0% (4.8% Q3)
Decreasing 19.4% (52.4% Q3)
No different 55.6% (42.9% Q3)
Q2 Compared to three months ago are tender enquiries:
Increasing 30.6% (28.6% Q3)
Decreasing 22.2% (19.0% Q3)
No different 47.2% (52.4% Q3)
Q3 How do you feel about future prospects for your business?
Optimistic 50.0% (42.9% Q3)
Pessimistic 13.9% (38.1% Q3)
Indifferent 36.1% (52.4% Q3)
Q4 Compared to three months ago are contract margins either increasing, decreasing or there is no change?
Increasing 5.6% (0% Q3)
Decreasing 38.9% (47.6% Q3)
No Change 55.6% (52.4% Q3)
Q5 How long do you, on average, have to wait for payment?
0-30 days 11.1% (0% Q3)
30-60 days 69.4% (90.5% Q3)
60-90 days 19.4% (9.5% Q3)
90 days or longer 0.0% (0% Q3)
Q6 Compared to 12 months ago, are payments:
Faster 0.0% (0% Q3)
Slower 63.9% (71.4% Q3)
No different 36.1% (28.6% Q3)