The market has remained bouyant in Q2 2022 with 54% of respondents reporting growth – this is a similar number to reporting same in Q1 2022, but with the vast majority now seeing sales growth in excess of 5%.  This is positive, but there has also been an upturn in the number of companies reporting declines of over 5%, up from 15 to 21%, underpinning that the market remains volitile.

The annualised picture also shows that, in terms of volume, the market has been pretty strong, with just 7% of businesses indicating that workload has actually decreased by over 5%.  Again anticipated sales are, on the whole, optimistic, with a 67% (down from 75% in the last survey) anticipating growth in sales and 59% reporting an increase in workload in the year ahead (down from 62%).

The key risks to the sector are identified as:

  • A prolonged war in Ukraine leads to material availability issues and continued inflation
  • Inflation impacts viability of planned and future projects
  • Inflation drives aggressive tendering – squeezes margin and impacts viability of businesses, particularly where fixed term prices are imposed unsympathetically.
  • Inward Investment becomes less attractive as companies consider the impact of potential future sanctions in the UK.
  • More ethical scrutiny of investors starts to impact sources of inward investment.
  • Prolongued Labour Shortages constrain growth
  • Retrospective elements of the Building Safety Bill create a blame culture that in turn leads to higher business failure rates and availability of insurance

FIS State of Trade Survey Q2 2022