How Emcor Taking It's Teddy Home Is Linked To UKIP

Having worked in the construction industry for nearly 30 years, it’s been sad to see the rapid decline of its building services sector. Last week brought the news that yet another building services specialist will be no more.

Over the last year or so the North West has seen long established, profitable businesses cease trading such as:

• Farebrother Engineering
• T Jolly Building Services
• Cross Services
• Barratt Electrical
• Airedale
• MJN Colston

Rotary Engineering also saw its profitable parts sold off to Lorne Stewart with the remainder closed down. We have since seen larger multi-million turnover national and international organizations such as Mitie Engineering and now EMCOR throwing in the towel, choosing to withdraw themselves and their employees from the industry.

With the latest news from EMCOR, it is sad to see yet more jobs about to be lost in the UK construction industry, it is part of a bigger picture. This involves our major building services companies devouring, big projects, big money and big profits during the good times. With the economy hitting the wall they either failed to adjust to the new market, going under, or petulantly left the market altogether, taking their teddy home with them.

This mirrors the economy as a whole whereby during the good times, Blair and then Brown’s governments spent money in abundance without putting anything in reserve for a rainy day, remember the note left by the Lord Chancellor ‘Sorry, there’s no money left’. Three years later and the country is now struggling to re-invent itself and create growth by continuing to do what we’ve always done, we think the good times will come back just like they were, trust me, they won’t. Not without a sea change in direction. 

After recession hit, the building services sector’s major clients, the main contractors were busy saving their own necks by reverting to type. During the good times, just as the government wished, they were happy to indulge in collaborative relationships and partnering as the profits came with it. But now, (as with the government), it’s the race to the bottom line, risks being taken on margin and particularly prime cost where they rely on the specialist supply chain and the SME’s they employ. We’re also seeing the ‘Its better in my bank that yours’ attitude returning with payment terms evidenced by the likes of Carillion increasing their payment terms to 120 days (4 months !!) and you have to pay them if you want YOUR money sooner.      

So what does the building services industry need to do to get back on track? Well for a start it has to wake up and lose it’s “we’ve always done it that way” attitude. It needs to diversify; be innovative; and do things differently. It needs to look to new markets and new technologies. Technology is progressing at a rapid rate of knots, embrace it, invest in BIM (it isn’t going away); get into new sectors such as IT, energy and infrastructure. 

Building services contractors need to go out and get their own clients rather than hanging off the tails of the main contractors. On a heavily serviced or infrastructure scheme why can’t the building services contractor be the principal contractor in their own right?

The main contractor market isn’t going to go away, but, however difficult it may seem, the whole supply chain and the SME’s need to collectively resist the poor treatment they receive.  They need to create changes that will benefit the whole industry, not just their own organization. Similarly, the government needs to show its teeth and put its money where its mouth is by insisting 4 month payment terms are not acceptable and legislate accordingly.

And the UK? Well the analogies are similar; we need to be in new markets and new technologies. We need to be going out and getting our own trade throughout the world. We need to resist the poor treatment we receive from our neighbours and show our teeth to greedy self-serving organizations. We need to maintain the service industries that are good for the UK finances whilst going back to what we were, world leaders in – manufacturing. However this can’t be in the old heavy industry where we can’t compete but in new bio-sciences and innovative technologies (such as graphine) where we can still lead the world.

All this can only truly happen with an exit from the EU, an unelected organization that is slowly dictating to us everything we do, yet it costs us millions on a daily basis. Yes, half our exports are currently to EU countries, and if the quality and price is right this won’t stop with our exit. There are many growing markets around the world that we need to be investing in instead of throwing our money away to the EU and getting nothing back. It’s hard to believe that nobody born since 1957 has had a say in whether we are in the EU or not, the over 58s had a referendum but that was for the ‘Common Market’ not the money draining, dictating gravy train we have now.

Both the building services industry and the country need to stop looking back with rose tinted glasses. We both need to wake up and smell the new money that’s out there if we’re prepared to re-invent ourselves and change. For the UK that comes with an in/out EU Referendum now.