Dundee businessman warns USA of dangers of recovery

Bruce Bisset, Director of Building Services at major Dundee employer Galloway Group, has reminded industry colleagues in the USA that, traditionally, more firms go to the wall during a recovery than fail in the depths of a recession.

Mr Bisset was speaking last month at the annual convention of the Mechanical Contractors’ Association of America (MCAA) in Scottsdale, Arizona in his capacity as President of the Building & Engineering Services Association (B&ES). He told his international audience that the reason was that an upturn in construction activity usually happened late in the overall economic recovery cycle – and that much of building engineering services work was focused on a similarly late stage in the construction process itself.

“This means that the cost of labour and materials will already have begun to rise long before the start of a building engineering services project – while client expectations will continue to hold down prices and keep margins tight,” said Mr Bisset.

He added that taking advantage of opportunities for growth was likely to require “an investment in people, assets, equipment and business infrastructure” – but that, while turnover might have improved, cash flow could become overstretched, to the extent
that any unforeseen circumstance could lead to collapse.

On a brighter note, a recent state of trade survey by B&ES from its 1,200 member companies has shown that business opportunities had increased in the second half of 2013 – with more firms acknowledging a rise in both orders and enquiries compared with the previous six months, and half of respondents reporting a rise in their turnover levels.

On his return from the USA, Mr Bisset added that “what we’re seeing in the UK tells us that there are good opportunities for growth, but still significant pressure on margins and costs. At Galloway Group we’re optimistic about the year ahead – and investing in local jobs, youth apprenticeships and new machinery in our drive to deliver high quality products to our customers in the UK and internationally,” added Mr Bisset.

Picture caption: B&ES president Bruce Bisset delivers his address during the MCAA annual convention.

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