The business cycle review of the building engineering industry speaks harshly about the industry's order backlog: it has decreased over the past six months, and the decrease is also expected to continue. Throughout the fall, it has been reported that the construction industry has bottomed out, but the building technology industry still has to wait for a real positive turn. There are strong grounds for expanding support measures for repair construction
New production continues to fall sharply in all areas – housing production, office and commercial space construction, industrial construction and public construction. The outlook has turned slightly more positive (average value in autumn -35,2 and in spring -51,2), especially in housing production. The biggest players believe that production will remain unchanged, which indicates the continuation of the low economy. On the other hand, in terms of industrial construction and the construction of public facilities, the biggest players even have great growth.
The decline in repair construction has eased
Repair construction is expected to continue to decrease in all areas, but measured by balance figures, the situation has slightly improved since spring. The average balance figure was -14,8 in the fall, while the corresponding value in the spring was -29,7. The outlook has brightened the most for the renovation of apartments.
"The government's decisions have disciplined the building engineering industry. Now is the high time to introduce the familiar 10 percent repair subsidy in order to maintain and increase labor-intensive repair construction. It would significantly increase e.g. implementation of energy efficiency renovations. Finland cannot achieve the building energy efficiency targets set by EPBD without quick support measures for renovation construction", CEO of Talotekniikkiliito and LVI-Tekniset Urakoitsijat LVI-TU Mika Hokkanen says.
"The government's decision to reduce the household deduction has a very negative effect on maintenance and basic improvement works. It would be worth taking a model from Sweden, where you can deduct almost 6 euros from renovations and there is no deductible at all. In addition, the extension of the household deduction to housing associations must be clarified during this term of office."
The downward trend in the order backlog continues
The order book of building engineering contractors has weakened during the previous six months, and the decline is expected to continue. The order book for building engineering designers has grown and the expectation for the coming half of the year is also slightly brighter than other operators.
The median order backlog with full employment has remained at three months for contractors and 5,5 months for electrical designers.
Requests for offers have decreased across the board, but the slight positive development seen in the spring continues: the change is now -34,1 compared to the spring value of -38,6. The regional variation is large, and the most positive situation is in Pohjois-Savo, Kanta-Hämee and Varsinais-Suomi. Looking by size category, for smaller companies, about every fourth offer led to a deal, while for large companies, the ratio was one in ten.
Turnover is in a downward direction, especially for small operators
Almost every second respondent estimates that their turnover will decrease this year, but the situation has improved since spring. Almost half of the largest players expect their turnover to increase. The weakest turnover development is expected in companies with turnover of less than EUR 0,5 million.
"The expectations show cautious optimism, but the whole is still in a downward direction and requires perseverance from the companies in the sector. Even though inflation has eased and the interest rate has fallen, it will take time for investment willingness to return", Chairman of the Board of Talotekniikkiliito, Business Director of LSK Electrics Oy Jarmo Töyräs toteaa.
The prospects for profitability are weak, but unchanged
Expectations for the development of profitability have remained unchanged since spring; half of the respondents estimate that their profitability will decrease and almost half that it will remain unchanged. Measured by the balance figure, all turnover categories expect the development of profitability to weaken.
The number of personnel is expected to decrease by 1,2 percent by spring. 2,8 percent of the personnel are laid off. The availability of skilled workers has weakened slightly since the spring, although seven out of ten respondents still see the availability of skilled workers as at least moderate.
"The economic situation is still challenging. However, there is plenty to do in the building technology sector in the future, even with the energy revolution. That's why it's important to ensure that there is enough skilled labor in our industry", Deputy CEO of Talotekniikkiliito and CEO of Sähkö- i utakutoitsijat STUL ry Marko Utriainen says.
See the business cycle overview graphs.
The building engineering association is LVI-Technical Contractors of LVI-TU ry ja Electrical and telecommunication contractors STUL ry a joint organization whose most important task is to promote the economic and political advocacy of building technology operators. More information building engineering association.fi
