Thursday, October 3rd, 2013 - KNX National Group
The 2013 Market Monitor released in September indicates that although charge-our rates have gone up by 7% since the 2011 survey – the cost of doing business has risen by around 25% over the past year alone. So the average electrical contractor is considerably worse off today than they were two years ago.
“Our industry – which employs more than 50,000 people across Australia, is in many way a barometer of the Australian economy,” says James Tinslay, NECA CEO. “36% of the average contactor’s revenue comes from residential projects. This has dropped by 10 percentage points over the past two years – indicating that there is less outsourced renovation work going on now. And just as we are seeing in much of the economic commentary in the media, whilst business confidence is on the rise, the economic indicators are not positive,” he adds.
“In this year’s survey the overwhelming message is that it is getting harder and harder for the smaller businesses to survive with rising costs of materials and labour, higher taxes and never-ending red and green tape. Over 80% of our industry employ less than 10 people – so we are the classic small business. And it is not surprising that as many as 5% of contractors doing business in 2011 have since closed their businesses – some voluntarily others not,” added Tinslay.
The 2013 survey key findings were:
• The average contracting business employs 13 people (up from 9 in 2011),
• Less than 8% of the industry employ more than 25 people,
• On-going maintenance work (in both residential and commercial work) is a considerably smaller percentage of work done now than it was two years ago,
• Contractors are specialising far more now (up 40% on two years ago),
• Overheads have risen by up to 40%,
• Home automation – possibly due to the NBN, is emerging as a key skills requirement,
• The number of apprentices being taken on is falling,
• The most significant ‘new technology’ skills relate to renewable energy and energy efficiency,
• 96% of contractors now carry smart phones – though the apps most commonly used are banking, maps and the weather,
• The mainstream suppliers have grown their share of the top-end of the industry,
• The percentage of direct imports is small – but it is growing.