Specialist Contractors continue to face difficult trading conditions according to the latest NSCC State of Trade Survey.
The results for the first quarter of 2013 show a fall in the number of orders with 27% of respondents reporting an increase, down 9% from the previous quarter. There has been a small increase in enquiries with 41% reporting that enquiries are up compared to 39% in the previous quarter; however, it remains to be seen whether these will be successfully converted into increased orders.
The number of specialist contractors reporting working at over 90% capacity falling from 40% to 27% over the last quarter. Nevertheless, businesses in the sector remain optimistic with 47% expecting their workloads to increase over the next quarter, up from 33% in the previous quarter. The longer term outlook is also positive with 48% anticipating increased workloads over the next year compared to just 11% who expect their workloads to decrease.
Late payment is still the most important issue affecting Specialist Contractors with just 8% being paid within 30 days. A member of the Contract Flooring Association (CFA) explained that the decision by certain main contractors to extend payment terms ‘under the banner of helping their supply chain’ has exacerbated the problems caused by a lack of finance and reluctance by the banks to support SMEs. All Specialist Contractors are advised to check any agreement which provides for extended payment terms and where appropriate challenge them on the grounds that they are ‘grossly unfair’.
NSCC Chief Executive Suzannah Nichol MBE said: “The appalling state of cash flow within the industry is not good for business, particularly in the current difficult market. The Government clearly recognises that in order to stimulate growth within the economy cash must flow through the supply chain. For too long it has been specialist contractors that have
effectively funded the industry and payment performance must improve to the benefit of all parties.”
NSCC contributes its findings to the State of Trade Survey published by the Construction Products Association, enabling the experiences of the specialist sector to be compared with the wider industry