AESIF Online

Sales fortunes down!...

It has come as no surprise to most, that the start of the year 2008 is considerably down on the same period for 2007 with regard to sales, “in fact sales are well down” and coupled with the now very strong euro exchange against the pound it is going to be hard for distributor / importers alike to maintain the supply of goods at current prices. The deepening fuel crises at home and abroad is also hitting suppliers and installers alike due to increased overheads.

The South of England has seen some marginal growth, but the Midlands has been struggling to get going again, and has been one of the worst hit areas, with a slump in sales made worst by installer competition driving down the prices for work. The out come to this could see many company’s going to the wall this year, through dwindling profit margins.

Fortunately for installers there does now seem to be a little progress with regards to sales for the end of April, with the sales year now finally starting in earnest. Enquires are now starting to flow, and orders are reaching distridutors, the spell of good weather is sometimes all that is needed to lift our sprites "So go sell those gates in 2008" and make it your slogan......

The housing market has also played a major role in slowing down the market forces in the UK, home owners have been left with significant rises to their existing mortgages fundamentally reducing expendable income. The sales on new properties are also down with exceptions to the North of England and Scotland which has yet, have not felt the slowdown, felt in other regions.

So what is likely to be the outcome in the months ahead for our industry, one thing is for sure the price of automation imported, is going to be affected the general feeling and consensus is that a price increases will be past on to installers as early has June of this year. We are expecting price rises in the region of 15 to 18% to stay the overall burden associated with the exchange rates, and transportation costs, which will add about £115.00 to the net price of say underground automation kits.

On the subject of installers pricing to the end user!.. I have had so many complaints from members, saying that some none member installers are quoting £1300.00 to install a double underground automation system?.  I can  confirm that AESIF has  had numerous complaints’ against such installers, from dissatisfied customers left with systems that are less than useless.

(i) National Standard Rates

The above JIB rates of pay are for employees working out side of the London areas for the UK & Scotland 2008, these labour rates do not include sub contractual employment.

My opinion on this subject is that “price always, but always reflects on the end results, and ultimately leads to short cuts in safety and to the professionally installed installation”.  The average guide price for underground automation installed and certificated to existing gate is £2800.00 plus VAT around the midlands  for a good  quality automation i.e.  Aprimatic, Nice, FAAC, Came, Fadini, BFT. “There is no logical reason for installers to undercut it's competition by such high margins” “what is the point”.

Remember any fool can work for nothing!, but not for long. When the work starts to dry up and there is no company profit to see an installer through the lean times, this is when these installers are at their most vulnerable, and we start to see companies getting into difficulty,. It is interesting to note now that distributors are also starting to run a strictly 30 days terms policy’s, to limit the risks of debt and bankruptcy against such customers. The trend is definitely up this year on liquidation’s so please don’t get caught up in them!.

I was always taught that a good business man should be within + or - 5% of the market competition when quoting for valued work, to achieve good business growth. If you were employing an estimator, that was loosing your company such levels of profitability, would you continue to employ him or her. "Answer NO".

The consumer tends to go on average with the middle quote for contractual work, remember to take a deposit, around 20% is normal. Customers that are unwilling to pay a deposit on the start of such projects have a tendency to be problematic so keep clear, and use your intuition.  “Don’t get caught out by client that can’t pay”.

On the subject of cowboy installation companies, if you believe that some companies are falling short in regards to standards, in not complying with the directives or  requirement, then let AESIF know. We will deal with them by passing your information on to Trading Standards and Health & Safety Executive, whom now have the powers to stop them trading, and fine them to boot.

Our overriding aim is to ensure that the medium and smaller sized businesses we represent enjoy maximum opportunities for growth, both now and in the future. Ensuring the concerns of the automation industry is brought to bear on the matters that affect it. And to safe guard the livelihood and welfare of the members and their dependants.

If you have any comments with regards to this article. Please contact AESIF with your comments, and we will gladly publish them.

 

Current affairs article.

John Birkett.

AESIF.