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13 Jun 20241 minute read

Engineering Services firms held back by slow growth

Engineering Services firms held back by slow growth

The latest quarterly survey of the UK engineering services sector, backed by leading trade bodies ECA, BESA, SELECT and SNIPEF, reveals that electrotechnical businesses continue to be held back by slow growth, partly blamed on a shortage of adequately skilled workers. The survey paints a picture of an overriding issue which has been of consistent concern for the last four quarters.

Half of all survey respondents (48%) said they currently have vacancies in their organisations. Half of these (50%) said they have trouble filling these vacancies due to an insufficient supply of applicants. Just under half said that applicants lacked the right attitude or behaviours (46%), and that applicants’ pay expectations were too high (45%).

Over 8 in 10 (85%) survey respondents were SMEs – meaning they employ 250 or fewer people.

These findings underscore ECA’s ongoing work to improve skills in the sector, including  the ECA Recharging Electrical Skills Charter . This highlights the significance of the electrical contracting sector and electrical skills to the economic opportunities and practical delivery of   the UK’s net zero goals.

Download the ECA Recharging Electrical Skills Charter

ECA COO Andrew Eldred said:

“Through further action at national and local levels we need to bring the number of electrical apprentice starts up to a sustainable level. We should also expand appropriate green upskilling opportunities for already qualified electricians, using the industry’s own ‘Electrician PLUS’ kitemark.

“Policymakers need to start listening to engineering services SMEs and reshape the skills system to deliver training routes which real-world employers value and recognise. This is essential if we are to build an appropriately sized workforce with the right qualifications to install low-carbon technologies efficiently and safely.”

Electrician PLUS was launched by The Electrotechnical Skills Partnership (TESP) in August 2023. It is a skills framework that focuses on the core competence of a qualified electrician as a foundation from which to upskill and train in low carbon installation.

Learn more about Electrician PLUS

When it comes to being paid on time, 63% of survey respondents said commercial clients and main contractors took 31 to 60 days to pay for work. 13% said this can take 61 to 90 days. Half (49%) of respondents said public sector clients can take 31 to 60 days to pay – and 13% - over one in ten – said they can take 61 to 90 days.

Almost three in 5 (58%) respondents said between 1 and 10% of their turnover is currently being held in retentions.

ECA Director of Legal and Business Rob Driscoll commented:

“Until the scope for late and abusive payment (including retentions) is resolved the health of the engineering services sector will continue to be stunted. Slow growth disproportionately affects SME firms who tend to be at the end of the supply chain. 

"Without more action to fairly and proportionately spread risk throughout the supply chain, there is a potential for unnecessary business failure in the industry. For electrotechnical firms to remain resilient, there must be fairer risk sharing between clients and industry. 

"There will be little growth in the economy towards green energy and net zero if those at the delivery end of the supply chain carry a greater burden of risk.”