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We’re fighting back, but the last thing we need is late payment

Back in April, at the height of the pandemic, it was hardly surprising that almost three quarters (74%) of the respondents which took part in the quarterly survey conducted by Building Engineering Business were expecting a sharp drop in business in Q2. In the event, the fall – whilst the largest recorded since the regular surveys began in 2016 – was not as severe as many had feared.

Better still, the latest news from the sector is that over two thirds (67%) of respondents are expecting turnover either to have held at Q2 levels in Q3, or perhaps even started to recover. It is a little early to get too excited, but what these statistics tell us is that the sector is fighting back and demonstrating the sort of resilience that will be required to build a healthy future.

There are, of course, casualties. The trend towards using less agency workers and subcontractors, which started last year (prior to COVID-19), has accelerated to the point where 30% of those taking part in the latest survey expect be using even fewer going forward. Again, hardly surprising in the circumstances.

The bigger worry is that, when the Government’s furlough scheme finishes at the end of October, large scale redundancies will follow, meaning that a sector already short of skilled workers will lose even more key people and that trainees will be discouraged from taking up a career in engineering. We can only hope that the Government’s £2bn KickStart Scheme and other parallel initiatives will help prevent that from happening. 

However, the biggest problem of all remains that of late payment. Despite Public Sector rules mandating payment within 30 days, it has been reported that only one third (32%) of direct contracts and 27% of indirect contracts are currently being paid within that timeframe. At a time when contracts can be postponed or cancelled altogether, any further damage to cash flow could prove fatal for some smaller businesses. Recovery and growth prospects could be in jeopardy for all the wrong reasons. 

UnitBirwelco’s own experience closely mirrors that of others in our sector. Unit Engineers and Constructors’ (UECL’s) office in Immingham suffered a huge loss of work due to the Coronavirus, but the business has stabilised, recovery is under way and we can once again start to think about growth. 


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