ECONOMIC UPDATE Credit under control n
Cashflow was also the subject of an
With an overall construction market worth a total of £107bn, opportunities still exist for electrical contractors , despite falls in public spending and the recession that continue to hit the construction sector, Dr. F. Noble Francis, economics director of the Construction Products Association (CPA), told delegates. However, he emphasised how challenging the market remained. In his in his sobering assessment of the UK economy,
Dr Francis talked delegates through forecasts for the main sectors in which electrical contractors operate. He painted a gloomier picture than his previous presentation at the 2010 ECA Conference, with the government’s austerity programme and continuing global economic uncertainty contributing to lower growth and investment forecasts. He was also downbeat about the likely impact of the forthcoming Green Deal. Looking at the overall construction industry, he said that it would continue to contract in 2012, and be broadly flat in 2013, with real recovery for the industry emerging only in the second half of 2013 and 2014 and significant growth – approaching five per cent – for the two years thereafter.
Among the sectors highlighted, education spending
is expected to fall as cuts in capital expenditure are made, down from £7.3bn in 2010/11 to £3.3bn in 2013/14.
However, as Dr Francis pointed out, with such a large budget for education, health and other sectors: ‘All you need is a niche within a niche in this sector and you’re looking at a few hundred million pounds of work.’ Private housing RMI work is expected to show relatively little growth, according to CPA forecasts. However, he said: ‘If the Green Deal does take off – but my suspicion is that it won’t – you would see that [growth-rate] line sky-rocket.’ Dr Francis continued: ‘It is a massive opportunity if the Green Deal works – and it does have potential,’ but, he warned, ‘it’s just far too complicated for the average consumer.’ Francis acknowledged how difficult conditions would be over the next year to 18 months, but concluded on a positive note: ‘Over the next five years, we have growth in there overall for construction – £5bn worth, and even at this point it’s a market worth £107bn. I know it’s difficult; it’s a challenging market – but there is an awful lot of work.’
instructive and engaging first-day presentation from Bob Partridge, managing director of Effective Credit Collections as he outlined a no-nonsense approach to effective credit management. Effective has been the provider of the ECA’s Debt Recovery Scheme for almost a decade, and he drew on his experience in debt collection to deliver some plain-speaking advice and tips on how to get paid promptly and reduce late payment. He offered some interesting tips for delegates to take home – such as listening to your new customers to learn about their business before any issues with payment arrive. He stressed the importance of non-paying customers believing that threats are real to encourage them to comply.
He pointed out the
importance of contractors knowing their customers and, in particular, being aware of the legal status of their businesses before starting new work – to assess the likelihood of payment and, importantly, to understand the legal recourse available against non-payment. Partridge stated two golden rules businesses should follow: nYou should be ensuring that every step you take in your credit management is an escalation of the process – not a repetition of the process; and: nYou should say what you mean and mean what you say. Following up threats with effective action is essential to have credibility with customers, he maintained. ‘Give customers an inch and, generally, they will take a
mile,’ Partridge said. Partridge focused on issues relevant to contractors chasing payments. He also stressed to delegates the importance of not ignoring demands for payment that threaten High Court winding-up orders. He suggested that, in the event of such a demand, members should contact the ECA legal department or a solicitor for advice, and do something about it.
THE COUNTERFEIT ISSUE ‘Counterfeit and
non-compliant products can kill’ was one of the key messages from BEAMA’s Keith Smith, who delivered a thought-provoking
presentation on the issue of fake and non-compliant products. He warned delegates of the dangers in using such products, and informed them about the active measures BEAMA and other members of the electrical industry are taking to hit the counterfeiters. He described the increasingly sophisticated methods used by counterfeiters, and showed examples of products that looked perfect from the outside but were frighteningly dangerous on the inside. He talked about the issues of counterfeit components, and warned about the implications on warranties of using non-compliant components in assemblies and systems. Smith spoke about the importance of the Electrical Installation Industry Charter, signed by 13 leading trade bodies, including the ECA, and
its shared commitment to fighting counterfeit and non-compliant products coming into the UK. Smith outlined the scale of the counterfeit issue, with an estimated seven per cent of world trade – or some $600bn – made up of counterfeit products. In the UK alone, the cost is £30bn – and an estimated 15,000 jobs – while counterfeit products in the UK electrical market are estimated at being worth £30 million a year. China is the source of 90 per cent of
counterfeit electrical products, and BEAMA is working closely with other organisations to try to combat the problem, monitoring the internet. sharing information and its database with a number of local and international authorities, trading standards bodies and international law enforcement agencies, and helping to carry out raids on counterfeiters.
Smith finished by directing delegates to the
new
www.counterfeit-kills.co.uk website, which is aimed at raising awareness of the potential dangers of counterfeit goods. n You can read our full interview with Keith Smith on pages 42-45 of this issue.
52
ECA Today July 2012
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