032 HPM 1012

HPM October 2012

SPECIALREPORT WWW.HPMMAG.COM Got a story? Ring us on 01732 748041 or e-mail twood@unity-media.com Dodging the double dip bullet The latest State of Trade survey by Williams & Co, an independent trade-only plumbing and heating merchant, takes a detailed look at the hopes, fears, plans and pricing policies of heating and plumbing businesses throughout the land... Sheating businesses are performing.ince 2004, the annual Williams & CoState of the Trade survey has taken adetailed look at how plumbing and Run in conjunction with HPM, the survey asks businesses large and small to reflect on the previous year, to make predictions about the coming 12 months, and to supply data (anonymously) about the rates that they charge for various types of work. This year’s results from 335 businesses and tradesmen are not the stuff that headlines are made of – in general, it seems that businesses are neither bullish nor bearish, with the volume of work, labour rates and the confidence of business owners seeming to remain steady. Only 12.3% of respondents described the previous year (summer 2011 to spring 2012) as Engineers and plumbers have the same amount being “poor” or “very poor”, compared with of money in their pocket as last year as the 39.5% who felt that those 12 months had been hourly rate has remained unchanged from 2011 “good” or “very good”. These results almost exactly match those from last year. admitted to cutting a price to close a deal. Now and a standard charge for a gas boiler service 66% confess to using this tactic, up from 55% remained unchanged from 2011, at £40, £30 and FUTURE PROSPECTS last year. £60 respectively. While there was some minor Regarding future prospects, the number of Another way of looking at this is that changes around the edges of the data, it is pessimists who expect trade to deteriorate cash-strapped customers are becoming more difficult to discern any significant shift in pricing. remains fairly constant at about one in five. aggressive in their tactics when negotiating with Of course, if prices remain stable for long Outright optimists slightly outnumber their tradesmen, and realistic businesses are simply enough, the effect is a general lowering of living downbeat colleagues, but more than half of reacting to these pressures. standards for tradesmen. For the last two years, respondents anticipate that the business climate Order books are continuing to shorten, with inflation has averaged close to four per cent, and will remain broadly the same as last year. just 14.6% of firms reporting eight weeks or more while this can be compensated to some degree in This is reflected in pricing data – 18.1% of of work in the diary, down from 17.3% last year. the number of hours worked, and careful firms reported cutting their standard rates, and of This is a longer term trend manifesting over purchasing and efficiency savings always help, these only a small fraction had seen price several years. At first sight, it seems inconsistent eventually labour rates will have to rise. reductions of over ten per cent. Slightly more with the survey’s broader “steady as she goes” Previous surveys have highlighted the lack of (20.1%) had increased prices, again, mostly by feel. It is unclear whether this is simply a result of market research undertaken by firms when setting modest amounts. the continued flat-lining of the newbuild sector, their pricing policy. This year’s wooden spoon for Getting customers to pay their bills remains a which tends to be scheduled further in advance market research goes to the GU6 postcode area relatively low priority issue, being reported as a than domestic repair, maintenence and improve, (Cranleigh in Surrey) where five respondents all problem by just 11% of tradesmen. While this is or simply a general market move towards a more described their rates as “average” for their area. up from nine per cent last year, it still remains demanding “right now” culture among Since they are charging respectively £25, £30, much lower than the peak of 31% in 2009. consumers. £40, £45 and £50 per hour, they can’t all be right. Despite all the worries about banks not In geographical terms, there now seems to be a We see similar patterns in Chester, Bolton, lending to small businesses, plumbers and split between the lower cost tradesmen, who are Swindon, Redhill and Canterbury postcodes, heating engineers must have the magic touch. reasonably evenly distributed across the country, where plumbers and gas engineers are charging 80.5% say that they have no problem at all and the more expensive firms, who are clearly well below both national and local norms but getting bank credit, and less than nine per cent concentrated in the south-east. think that they are expensive - trust me guys, you feel that it is having a major impact on their Of the top quartile (most expensive 25%) of really aren’t! business. gas engineers, just five of them were based Our last question asks whether respondents Suppliers are even more generous, as only outside London and the home counties. expect to still be in the industry in five years time. 4.3% of respondents felt that their business was Bizarrely, three of those five were within a few Again, there are not many changes from last year, constrained by insufficient credit from suppliers. miles of each other in the Potteries – not with a reduction in expected career changes being Quoting a hopeful price and then discounting normally considered a particularly wealthy offset by a similar rise in the number expecting to if put under pressure appears to be a provincial centre. retire, and a slight decrease in confidence – a recession-induced habit that is hard to break. All three of our benchmark median rates, the move from “yes, certainly” to the slightly less Before the recession, only 25% of firms hourly rate for gas work, general plumbing work definitive “yes, probably”. 32 OCTOBER 2012 HEATING & PLUMBING MONTHLY enquiry number 123


HPM October 2012
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