Industry survey reveals fears on economy

A new member survey from the Association for Consultancy and Engineering (ACE) has revealed significant business concerns as a result of current economic uncertainty in the months ahead.

Published ahead of an expected economic statement from the new chancellor, the snap member poll reveals that 86% currently view inflation as an “operational concern”.

Client confidence (79%) and wage inflation (71%) also topped the list of business concerns, ahead of higher energy costs (40%) and price increases from suppliers (36%).

Half of respondents (50%) are unsure whether the construction industry will remain resilient and cope with the levels of uncertainty in the economy, with just over a quarter (26%) of members having either “significant concern” or “some degree of concern” that their business will be able to cope.

This may, in part, be down to currently unfilled order books for 2023. Nearly a fifth (19%) of respondents order books are more than half-empty in the year ahead, 45% have between half and a quarter of their capacity available, and 29% under a quarter of their capacity available.

To weather the current economic storm ACE members have considered a range of interventions, including wage increases for staff (62%), price increments for clients (57%), as well as driving efficiency and cost cutting where possible (38%).

Commenting on the results, Stephen Marcos Jones, CEO of ACE said: “From our survey, it is clear that the current macroeconomic situation is causing major concern for many of our members with a large degree of economic uncertainty affecting business confidence, at a crucial moment when we are expected to make the investments which will deliver our net zero future.

“The forthcoming economic statement will provide an opportunity to reassure the construction industry. Not only do we hope for more detail on the energy support package for businesses beyond the initial six month period, but additional clarity over the pipeline of projects. Recommitments on government spending will go a long way to boosting confidence.

“An assured programme of projects from the public sector will drive growth and support jobs across the UK, with positive knock-on effects on private sector confidence, while delivering political ambitions around economic growth and jobs.”

“On the campaign trail the prime minister made several very prominent pledges on rail and road infrastructure and we need to see these turned into viable projects. Our members stand ready to work closely with government at all levels to help make this a reality.”

Survey respondents reflected a wide range of ACE’s membership base. Together, ACE member companies employ 250,000 people around the world, including 60,000 in the UK, directly contributing £15bn to the UK economy a year. ACE member companies play a key role in the design, delivery and management of the UK’s national infrastructure and built environment, playing a vital role in helping to achieve the UK’s net zero ambitions.

The snap survey was open between 5 and 20 September 2022.