Keeping it flexible
Research from Electricfix shows that contractors are having to be more flexible to respond to jobs in tougher market conditions. John Mewett, marketing director for Electricfix, discusses the latest findings on how the trade is feeling about the future and how this is impacting stock management.
Reports of movement in house prices, together with headlines about growing confidence in the economy, will be welcome news to those who rely on a buoyant housing market for regular work. It also indicates a general feeling that the economy may have turned a corner and that there is reason for cautious optimism about the future, a sentiment confirmed in feedback from our own customers.
Each month Electricfix asks a selection of customers how they are feeling about their business prospects, market conditions and industry issues. Their views are reported as ‘Trade Pulse’. The most recent report reveals that electricians are feeling more optimistic about the next 12 months, compared to 2009. When asked how they were feeling about the economy, 49% of contractors thought that things would get better this year, with 48% also believing business will improve in 2010 as a result. This is compared to only 6% who are feeling very downbeat about the year ahead.
However, while there are signs of optimism, this is balanced by caution. Only 19% expect to spend more on major purchases, with 45% expecting to keep their spending at the same level in 2010, compared to 11% who expect to spend less.
Reasons for caution
This caution can be explained by recent levels of work, which has in turn, influenced contractors’ approaches to securing projects. The report reveals an increasingly cost conscious marketplace, with some Electricfix customers having to adjust quotations to win work. Many electricians also described a shift in working patterns where work now tends to be booked week by week rather than months in advance.
These differences in work patterns appear to be having a knock-on effect on how stock levels and cash flow are being managed, with flexibility very much the order of the day. Vans that were full with a whole range of supplies a year or two ago may now only hold the ‘essentials’. Our customers tell us it is a fine balance between holding stock to respond to jobs quickly, but not carrying the financial burden (and security risk) of having unused stock sitting in the van.
This close-eye on maintaining efficient stock levels has meant that stock availability is also a growing consideration for electricians. The feedback we receive is that our customers don’t need the headache of driving round trying to locate a component only to find it’s not available, or having to spend time queuing or negotiating on price. This is encouraging contractors to plan and buy differently. As a result, our next-day delivery service is proving popular, as is our fixed price model which makes quoting and invoicing simpler.
Exactly what 2010 will bring remains to be seen, but if contractors respond to the challenges ahead with the same ingenuity as our research suggests they did during 2009, they will be well placed to make the most of the opportunities that do arise.
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