BESA NEWS ANALYSIS
Top 30 contractors surging ahead
The largest 30 mechanical and electrical (M&E) contractors enjoyed more than 23% revenue growth last year and accounted for about a quarter of the total turnover of the sector, according to a new report from the Building Engineering Services Association (BESA)
T
he latest edition of BESA’s annual Top 30 Contractors’ report compiled in partnership with chartered quantity surveyors GHCS,
technical recruitment fi rm GH Engage, and industry analysts Barbour ABI shows that the combined turnover of the largest 30 fi rms in the sector grew to £6.4 billion in 2023/24. The total m&e market is estimated at £23.2bn so,
with the Top 30 accounting for approximately 25%, there is plenty of room for further consolidation in what remains a fragmented sector. The report, which ranks contractors by their total turnover for the previous fi nancial year and is compiled using published information from Companies House, showed that fi rms were standing up well to “various fi nancial headwinds” and were poised for further growth in 2025. The research also detected subtle shifts in the
way supply chains are now working with more of the large m&e fi rms heading up major construction projects because of the growing importance of building services, particularly in some of the high- tech growth areas like data centres, healthcare, pharmaceuticals, life sciences, and defence. Several companies told BESA that they were now
operating outside ‘traditional’ construction sector boundaries and fi nding specialist markets that placed a greater value on high quality engineering services, and which are less vulnerable to short- term fi nancial shocks.
Tariff s
The fact that the UK has also become something of a ‘services superpower’ also helped to insulate it from the full impact of US tariff s which were primarily aimed at trade surpluses in manufactured goods, the report found. “The overall mood is surprisingly buoyant,” said
BESA’s chief executive offi cer David Frise. “Judging from the comments made in our report by company directors and senior business fi gures, the outlook is generally optimistic despite the considerable fi nancial, technical and regulatory hurdles they are having to navigate.” The best performing m&e engineering businesses
are managing to remain calm in the face of the challenges they face, according to GHCS/GH Engage managing director Gokhan Hassan. “There is a growing spirit across the sector that
goes beyond simple ‘resilience’. The specialist building engineering sector has some signifi cant advantages because of its ability to add value in sectors that are largely recession proof,” he said. The BESA report found that, not only are these
sectors continuing to build with confi dence, but they are also heavily reliant on high value building services engineering to provide clean rooms, resilient cooling systems, water and energy effi ciency, etc. In many such facilities, the services represent upwards of 60% of the value of the overall project and so, in a growing number, the m&e provider is taking the role of lead contractor. This trend is also upending the traditional supply chain structure that has characterised construction for decades and which is, in large part, responsible for repeated failures to deliver projects on time, to budget, safely and sustainably. It also exposed specialist contractors to fi nancial risk linked to unfair contract clauses, late payment, soaring insurance and material costs. The BESA report also referred to the impact of the Grenfell Tower public inquiry and its recommendations for further regulation, along with
the developing infl uence of the Building Safety Act. This has had a dramatic impact on planning
approvals with some higher risk building (HRB) projects held up for over 40 weeks at huge expense to developers. BESA said that teething problems and lack of resource at the Building Safety Regulator have created an ongoing problem that will not be solved quickly and is having an impact on investors’ confi dence in the residential building market. This, of course, has wider implications for the
country. Not least the government’s ambitions to build 1.5 million new homes in this parliament because another key fi nding of our report is that builders and developers are turning their backs on the residential sector in search of less risky investments.
Delays
In fact, the rate of housebuilding in London hit a 16- year low in the fi rst quarter of this year, largely due to post-Grenfell safety regulations creating planning delays. The fi nal report issued by the Grenfell Tower public inquiry in September last year also contained a raft of proposals for further regulation of the industry and, while it received wholehearted support from the government, it further reduced
David Frise
8
July 2025
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