Confidence High in M&E Sector

Manufacturing and engineering (M&E) influences infrastructure development, job creation and contribution to gross domestic product, therefore it is of great importance to the UK economy.

According to the Mechanical and Electrical Contractors Market Report – UK 2017-2021 Analysis report, the market for mechanical and electrical (M&E) contracting has increased by almost 25% since the 2012 low.

The market entered a period of sustained growth in 2013 driven by a buoyant new build market, with rising output in the office and infrastructure sectors in particular. This growth continued in 2016, with health and education output also supporting improvement, despite constrained public sector capital spending.

Factors supporting market growth include developments of higher specification, more complex products, changing legislation requiring specification of higher value products as well as greater use of controls and energy efficient products, continued strength in data centre construction and greater levels of outsourcing of M&E services.

Factors negatively impacting on the market include public sector budget constraints, uncertainty over the impacts of Brexit and greater use of off-site manufactured panels and modules.

A survey by the Building Engineering Business of building engineering services contractors across Great Britain found that optimism is running high with 85% expecting turnover to increase or remain the same in the next three months.

80% maintained or increased their turnover, however many of the respondents reported that their business costs had risen, with 65% reporting materials price rises and 50% facing labour cost increases.

ECA director Paul Reeve, and BESA commercial director Rob Driscoll, said: “These figures show that the engineering services sector overall is in a confident mood, even against a backdrop of commercial and political uncertainty and rising operational costs. However, the true effect of Carillion’s insolvency on the supply chain is yet to come through.”

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