News
Construction activity hit in Q1 n
The latest Construction Trade Survey shows that activity in the majority of the
construction industry fell during the first quarter of 2013. Once again, poor weather exacerbated already falling demand, with contractors, specialists and civil engineers all reporting declining orders for future work. The Office for National Statistics also released
estimates for construction output in Q1 2013 that showed it down 6.5 per cent on the same quarter a year before, and down 2.4 per cent on the preceding quarter. Not since the fourth quarter of 1998 has construction output been as low.
ECA condemns late payment n
The ECA has condemned companies that delay
payments to suppliers, saying they are effectively working against their own supply chain – and economic growth. Steve Bratt, ECA group CEO,
said that the ECA categorically opposes delayed payments to suppliers. This is particularly true for payment periods that now range up to 120 days, irrespective of the arrangements behind them, and for the practice of charging suppliers seeking more timely bill settlement. Bratt said: ‘Increasingly, we
are seeing buyer references to securing “early payment”, when what we are really talking about is suppliers being paid in a reasonable time. There is nothing “early” about it.
The notion that anyone can seek to make a virtue out of paying a supplier in up to 120 days is astonishing – even more so when the supplier has to pay to receive timely payment.’ Bratt also suggested that
the idea of main contractors delaying payment because it is ‘necessary to help with the balance sheet’ is bogus. He said: ‘Unless the client is also holding onto the main contractor’s project cash for hugely extended periods, this tactic is indefensible. I’d also be worried, either as a client or a supplier, if any main contractor actually made a play of holding onto suppliers’ cash to prop up their balance sheet.’ Bratt continued: ‘Slow
payment is no more than a buyer receiving goods and services,
Commenting on the survey, Noble Francis,
economics director at the Construction Products Association, said: ‘The weather in January and March undoubtedly had a negative effect on activity in construction and, as a result, we would expect to see a degree of catch-up in the second quarter. However, prospects for this year are still poor, with a subdued private sector and continuing austerity affecting most sectors of the industry. Overall, construction output is expected to fall two per cent this year, but private housing and infrastructure are potentially looking more positive and could be drivers of growth for the industry next year.’
and then holding on to the supplier’s money. We recently suggested to government how it could develop its prompt payment code (PPC) and we encourage it to do whatever it takes to support the construction supply chain.’ Bratt concluded: ‘Right now,
the government is desperately looking to construction for growth. Delayed payment hampers the growth of suppliers. It can – and does – lead to insolvency, which most would agree is the exact opposite of growth. As it works on its next construction sector strategy, the government must remain committed to tackling the issue of late payment, and continue to name and shame those firms who won’t sign up to a much tougher PPC.’
ESC urges overhaul of recall system n
The Electrical Safety Council (ESC) is calling for manufacturers to face unlimited fines if they
undertake inadequate or slow recalls, following growing concerns over the effectiveness of the system and the emergence of a number of serious incidents involving recalled products. The current penalty for manufacturers who delay or
take inadequate action in a recall situation is only £5,000, but the ESC would like to see tougher penalties, based on a percentage of profits from the recalled product. It is also inviting Trading Standards to set out clear and unambiguous guidelines on exactly what a manufacturer should do if one of their products is subject to a recall. The ESC’s research shows that, typically, only 10-20 per cent of recalled electrical products are ever returned, exposing millions of people in the UK to the risk of fire or
6 ECA Today June 2013
BEAMA positive on smart meter rollout plans
electrocution. Over the last six years, there have been 266 recall notices for electrical items. In addition to the proposed change to fines, the ESC has outlined proposals for a new, centralised product registration system, which could help manufacturers trace their products to the consumer in a recall situation. The ESC’s Emma Apter, said: ‘The current recall system
is not effective enough. People are confused by it, and it’s not clear what level of action manufacturers are expected to take. If more people registered their products, and clear guidelines were set for manufacturers to follow, it would be significantly easier to trace recalled items. Our research shows that people would be more likely to register their products with an independent organisation like the ESC, and we hope that industry will work with us on ways to achieve a higher return rate for recalled items.’
BEAMA has welcomed the recent announcement from the Department of Energy and Climate Change (DECC) on smart metering and believes that it will facilitate the installation of this technology under the foundation phase of the programme. It claims this will bring forward the consumer benefits made possible by smart metering and provide a stronger base for the mass roll out of equipment. BEAMA says the postponement of the mass rollout to 2015 will allow sufficient time for all the industry players to develop and test the systems required to make the roll out a complete success. It also allows for the gathering of essential experience from the foundation stage. Howard Porter, BEAMA
CEO, commented: ‘The decisions and proposals issued by DECC on supporting smart meter rollouts under the foundation stage will, we believe, lead to more smart metering systems being deployed over the next two years, allowing more consumers to experience the benefits at an earlier stage. This announcement removes any uncertainty and increases confidence in any deployments that are made.’
SHUTTERSTOCK/GORDON BALL LRPS
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