Demand for UK trades has boomed since the end of the initial lockdown in July 2020. Plumbers, electricians, building-maintenance firms and other trades making up the UK’s 1.3-million-business field-service sector have seen their workloads increase by 70 per cent year on year, according to a new report published today by field service management software provider BigChange.
BigChange’s State of the Field Service Sector report reveals that three-quarters of trades businesses saw demand increase in the year to July 2021. Almost one in five (18 per cent) took on over double the work they did in the 12-month period before. BigChange’s research indicates that demand for Plumbing & Heating, Plant Hire and Drainage increased fastest.
- Demand for trades soared by 70 per cent post-lockdown and turnovers are up 79 per cent
- But Covid, compliance issues and rising costs mean just half of firms are currently profitable
- 13 per cent of firms fear they could go out of business in the next 12 months
Despite soaring turnovers (up 79 per cent on average) and average price increases of 47 per cent, fewer than half of trades businesses (48 per cent) said they were profitable in the year to July 2021. Debts have increased by 117 per cent among the worst performers in the sector, and one-in-eight firms fear they will fail within a year as Covid complications, compliance issues and surging costs continue to hit hard.
Most businesses surveyed (81 per cent) said that the pandemic had continued to impact their finances negatively in the last 12 months. 67 per cent said their margins had been squeezed by the cost of complying with new regulations, and rising prices for materials, fuel and labour are cited as ongoing problems by more than 70 per cent of respondents.
Richard Warley, BigChange CEO, comments: “While demand for the trades has boomed since the first lockdown, this backbone of the economy is not as strong as it might look. Only half of firms are profiting from this extra work. There’s a big difference between growing and growing stronger.”
“Many trades businesses have seen profit margins hit by a perfect storm of Covid, compliance and rising costs. One-in-eight fear they won’t last another year, partly because they’ve taken on more debt and racked up colossal overtime bills meeting customer demand.
“The strong, profitable businesses are succeeding by working smarter to stay in control of their operations, keeping a lid on costs, and making their teams more productive. They are using technology to improve management oversight, plan better and automate processes, and improving communication and response times as part of efforts to make the customer experience their new source of competitive advantage.”
Quotes from three UK trades businesses growing stronger post-pandemic
Slick processes and strong finances put booming Nserv on track for further growth
Founded in 2018, Nserv provides facilities maintenance and construction services to retailers, restaurants and care homes across the South East of England. The company, whose headquarters are in Corringham, Essex, increased its headcount to 57 people, grew turnover by 75 per cent to £5.1 million and delivered a healthy profit in the year to August 2021.
Dean Barber, Managing Director at Nserv, comments:
"Work with our retail and restaurant customers was affected during the initial lockdown, but we came out of that period three times stronger. We picked up big contracts to support national organisations in the South East and introduced new technology to help manage jobs and our workforce more effectively."
"Growth has been incredible since then. Those contracts boosted the business, we've been bringing sites back online after lockdown, and our slick processes and strong finances help attract new customers every week now. We are hiring across the South East in anticipation of further growth and another good year.
"We've doubled the size of the team since the first lockdown and brought in some great people, but talent has still been an issue. Skilled tradespeople are hard to find, and we are crying out for good electricians in particular. We could have grown even faster if there were more of them.
"We've been OK on fuel costs because our people are spread across the South East and live close to where they work, but materials is a tough one. We are quoting market rates and spending a lot more time justifying why they've gone up so much. The cost of ply has increased by 40 per cent in the last six months, for example, so a quote can end up being inaccurate by the time it's approved."
Midlands expansion helps drainage specialist improve service and cut costs
Leeds-based Subscan UDS provides a range of drainage, utility, and surveying services - from land surveying to underground utility mapping, plus extensive drainage services including drainage clearance, CCTV surveying, drain lining and rehabilitation. It operated mainly as normal throughout 2020 and has seen demand increase by a fifth over the last 12 months.
The company employs 115 people today and has just opened a new depot in Derby to support expansion into the Midlands area. It anticipates growth of 20 per cent and achieving a £10 million turnover next year.
Kirk Mason, Operations Director at Subscan UDS, comments:
"Subscan are growing strongly due to significant contract wins and recruiting at pace. Our investment in the new Derby branch means we are closer to customers in the Midlands area and will allow us to serve them better."
"Shortages of skilled staff has been our biggest challenge. We are having to pay more to recruit and retain HGV drivers and Brexit has made it harder to bring in the specialist surveyors we used to from areas such as Poland and Lithuania. We’ve got 30 people in that department doing the work of 45.
"The cost of fuel and the scarcity of raw materials has been an issue. One of the reasons we opened in Derby rather than serving the Midlands from Leeds is to save on fuel costs and eliminate overnight stays. We are also bulk buying and storing materials in much larger quantities rather than ordering them when required."
Celsius targets £1 million mark after a rebound year for residential plumbing
Celsius Plumbing and Heating works with homeowners, private landlords and property agents across Edinburgh. Although the company took a hit when forced to focus on essential work only during the first 2020 lockdown, its fortunes have bounced back strongly since then.
Celsius delivered a 36 per cent turnover increase as demand rebounded and expanded its team from 12 to 18 people in the year to August 2021. It targets similar growth this year and aims to break the £1 million turnover barrier for the first time.
Michael Cairns, Company Director at Celsius Plumbing & Heating, comments:
"Demand for our services went crazy when the first lockdown lifted. People were desperate to get work done, and we had a backlog of almost 500 jobs to get through."
"We worked hard to make sure people were confident letting us into their homes and re-engineered our customer journey to improve convenience and reduce risk. We introduced online booking as part of an enhanced digital experience that keeps clients fully informed on things like arrival times, job progress and the steps we've taken around Covid.
"We've also optimised our operations to the point that we can pretty much guarantee a same-day response for reactive work. Clients love that attention to detail, they are recommending us to their friends, and demand is increasing as a result.
"It was clear that cash-flow could be a problem, so we took steps to mitigate that risk with instant digital invoicing and online payments. We've also automated as many back-office processes as possible. The upshot is that we are more profitable than ever before and growing stronger every day.
"I'm aware of companies in which skilled plumbers are jumping ship for an extra £1 an hour, but talent hasn't been an issue for us. We've invested in the future by taking on apprentices, we've created a culture that makes people want to stay, and we've got an excellent network of trusted subcontractors plugged into our systems to help manage spikes in demand."