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The UK has more to do to be internationally competitive in low carbon technologies, according to a new report from ACE. Respondents to the 2011 ACE State of Business survey agreed that the UK was generally not internationally competitive in solar heating (53%) or marine generation (50%). However, the UK rated more highly in offshore wind generation.
Nelson Ogunshakin OBE, ACE chief executive, said: “This government pledged to be the greenest on record, and the engineering industry supports that ambition. However, the decision to cut feed-in tariffs for large photovoltaic installations was an unusual one, and will impede the development of photovoltaics in the UK.
“While we are mindful of the economic challenges that the UK faces, low carbon technology is an opportunity to grow the economy and create jobs, as well as reducing our dependence on oil and helping to plug the energy gap. Building our international competitiveness in these technologies is something the engineering sector is keen to do.”
In other survey findings, public client activity is expected to decline overall. However, 54% expect that private client activity will increase over the coming twelve months. Key UK growth markets over the next three years include housing (60% expecting increases in earnings), energy (69%), commercial property (61%) and waste (64%).
UK businesses continue to look to overseas markets for growth prospects. Key markets where earnings growth is expected include the Middle East (84%), South Asia (83%), South East Asia (80%) and Africa (75%). By contrast, Western Europe and North America are not expected to generate significant earnings growth.
Nelson Ogunshakin said: “This year’s report provides reinforces beliefs that the UK’s infrastructure is falling behind our international competitors. As overseas markets raise the bar on infrastructure development as a core part of their growth ambitions, it is essential that the UK does the same. ACE will continue to work with governments and developers to ensure that the UK capitalises on the opportunities available.”
The ACE State of Business 2011 report is available here.
For media queries please contact Gavin Pearson (020 7222 6557) (gpearson@acenet.co.uk).
Notes to editors
ACE (the Association for Consultancy and Engineering) represents the UK’s construction and infrastructure design and professional services sector. It represents almost 600 companies operating across the UK built and natural environment, who employ a combined total of 90,000 employees.
ACE member companies generate around £7 billion per year for the UK economy. They are instrumental in delivering infrastructure and property development in a wide range of sectors.
For the full report please click here.
Key findings from the 2011 ACE State of Business report:
• 33% of companies reported approaching their bank for capital in the last 12 months, in comparison to only 15% in the previous year
• Companies report that there has been little improvement in the availability of credit since last year.
• Only 2% of companies have reported a slight fall in the cost of borrowing for their business over the past 12 months.
• Whilst conditions remain tough, generally expectations for many of the sectors over the next three years have improved from one of declining fee expectations in 2010 to one of stable prospects. However, sectors such as defence, transport, and education are expected to undergo a reduction in the expected levels of fee earnings.
• Most companies indicated that they intend to enter the energy/power generation sector (44%). There were also a significant number of companies that indicated their intention to enter the housing (42%), commercial (40%), industrial (35%) and waste (42%) sectors.
• The Middle East is still considered a key market which companies expect to enter. The number of companies that indicated they were entering the Asian markets ranged from only 11% (Central and South Asia) to 21% (South Asia), despite some having significant rates of growth. This is likely to reflect the unfamiliarity with local markets on issues such as politics, planning, legal processes and regulations.
• When companies felt that the Middle East and Africa would provide their largest area of growth for their company.
• The majority of companies (55%) indicated that their insurance premiums were stable in proportion to their rate of turnover, improving on 2009 (46%).
• The number of companies reporting that public sector insurance requirements would be less favourable over the next three years has increased for the second year running.
• The last year has been a challenging one for the sector with 44% of companies making redundancies.
• Since 2009 expectations regarding the ease of recruitment have been shifting towards being more difficult with only 5% indicating some level of difficulty in 2009 compared to 27% in the current survey.
• The majority of firms felt that the level of redundancies was going to remain unchanged between 2011-14, and the number indicating that there would be an increase fell from 22% in 2011 to 5% in 2014.
• Currently 30% of companies report that there is a strong possibility or that they will be active in terms of mergers and acquisitions in the next three years.
• Just over half of companies (51%) reported that the scale and change of pace of mergers and acquisitions was increasing.
• More than two thirds of companies (68%) are concerned about the UK’s level of sovereign debt. This is up from just under half (47%) in 2010.
• 62% of companies feel that the coalition has effective policies in place to deal with the public deficit, up from 54% in 2010.
• Over three quarters (78%) of companies feel that infrastructure spending should be prioritised further.
• The majority (70%) of companies believe that the UK’s infrastructure is falling behind that of our international competitors.
• 70% of companies feel that delaying infrastructure spending is having a detrimental effect on future economic growth.
• More than half of companies (60%) felt that maintenance cuts would push up long run capital costs.
• Central government procurement was rated by 65% of companies as being very poor or poor (63% in 2010), and local government by 70% of companies (71% in 2010).
• Only a third of companies indicated that the government’s carbon reductions targets were sufficiently reflected in clients demands
• Looking more generally at the market, we asked companies to rate the UK’s international competitiveness on a number of low carbon technologies. The UK only received an above average rating in offshore wind generation.
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