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UK Mechanical and Electrical Engineering market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Mechanical and Electrical Engineering market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Key Issues Covered

  • How are M&E margins likely to change?
  • How will Brexit impact the market?
  • Are the best prospects in new construction or R&M?
  • Which end-use sectors offer the best prospects?
  • How will government spending restrictions change, and will these impact the market?

Definitions

Companies that provide mechanical & electrical (M&E) services usually provide the necessary skills required through a combination of in-house resources (usually a team of qualified engineers) and specialist ‘service partners’ contracted to provide assistance across the work spectrum.

Services are subjected to British Standard and other industry standards.

The following is a list of the main mechanical and electrical contracting services provided by the majority of companies, though some companies offer other specialist services:

  • Heating and hot water installations
  • Domestic water services, including infrastructure, storage systems
  • Ventilating and air conditioning
  • Acoustic control
  • Electrical and lighting systems
  • Emergency lighting
  • Public health services, including water treatment
  • Cooling towers
  • Plumbing and drainage systems
  • Control systems and building management systems
  • Lighting protection
  • Uninterruptible power supplies
  • Fire engineering (alarms, hosereel and sprinkler systems)
  • Access control
  • Lifts
  • Energy supply and management
  • Security systems

The report is split into electrical work and mechanical work. However, it is difficult to split the above list into two categories as many services fall into both. However, a general list for each of the categories is compiled below.

Electrical work: Ventilating and air conditioning, acoustic control, electrical and lighting systems, emergency lighting, control systems and building management systems, uninterruptible power supplies, fire alarms, access control, lifts, energy supply and management, security systems.

Mechanical work: Heating and hot water installations, domestic water services including infrastructure and storage systems, public health services including water treatment, cooling towers, plumbing and drainage systems, lighting protection, hosereel and sprinkler systems, lifts.

Market Segmentation and Trends

Demand for electrical contracting services accounts for the largest and growing proportion of the total M&E contracting market, largely because electrical contracting services are more in demand in all industries, including the domestic, commercial, industrial and public non-residential sectors. The digital and automation trend has also tended to influence growth in the sector at a faster rate than the mechanical element of the market.

Mechanical contracting services - which includes the installation of products such as cooling towers, lifts, air conditioning, sprinkler systems - are only in demand by certain sectors of the construction industry, such as factories, offices, schools and hospitals. Demand for mechanical contracting services in the domestic sector is limited to heating and water installations, infrastructure, water and sewerage pipes, lighting and other specialist services, such as swimming pools (pumps and valves) and air conditioning for the top end of the market. However, there is an overlap between some M&E work, particularly in industrial, commercial and public non-residential applications, so it is difficult to distinguish the two by product or service.

Company Profiles

  • NG Bailey
  • Balfour Beatty Engineering Services
  • TClarke
  • Crown House Technologies
  • Michael J Lonsdale
  • Lorne Stewart
  • Skanska Rashleigh Weatherfoil
  • SPIE (formerly SPIE Matthew Hall)
  • SSE Contracting

Expert analysis from a specialist in the field

Written by Terry Leggett, a leading analyst in the B2B sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The M&E sector is now facing very different prospects, depending on the customer focus of the contractor. This is a direct consequence of the Brexit decision and the varied impact it has already demonstrated. There remain some very strong areas of demand, while others are faltering amid economic uncertainty Terry Leggett
Senior B2B Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Strong growth in 2017
              • Figure 1: The market for M&E contracting, 2013-17
            • Mechanical and electrical contracting – different trends
              • Figure 2: Segmentation of the M&E contracting market, by type of work, 2013-17
            • New construction and R&M have different trends and influences
              • Figure 3: Segmentation of the M&E contracting market, by type of demand, 2013-17
            • Market drivers
              • Figure 4: Construction output in Great Britain, 2013-17
            • Continued growth prospects
              • Figure 5: Forecast market for M&E contracting, 2018-22
            • Companies and brands
              • Fragmented and highly competitive
                • Figure 6: Segmentation of work undertaken in the plumbing and heat and air conditioning installation industry, by number of employees, 2017 (£ million)
                • Figure 7: Segmentation of work undertaken in the electrical installation industry, by number of employees, 2017 (£ million)
              • What we think
              • Issues and Insights

                • The Brexit issue
                  • The facts
                    • The implications
                      • Climate change targets slipping
                        • The facts
                          • The implications
                          • The Market – What You Need to Know

                            • The Brexit impact
                              • Selective tendering
                                • Legislation and technology can be key drivers
                                • Market Size

                                  • Major growth in 2017
                                      • Figure 8: The market for M&E contracting, 2013-17
                                  • Market Segmentation

                                    • Very different trends – M&E
                                      • Figure 9: Segmentation of the M&E contracting market, by type of work, 2013-17
                                    • New construction and R&M are very different sectors
                                      • Figure 10: Segmentation of the M&E contracting market, by type of demand, 2013-17
                                  • Market Segmentation – Electrical Contracting

                                    • Both new construction and R&M inconsistent
                                      • Figure 11: Segmentation of the electrical contracting market, 2013-17
                                    • New construction
                                      • Figure 12: Segmentation of electrical contracting from new construction projects, 2017 (£ million)
                                    • R&M demand
                                      • Figure 13: Segmentation of electrical contracting from R&M projects, 2017 (£ million)
                                  • Market Segmentation – Mechanical Contracting

                                    • Both new construction and R&M growth in 2017
                                      • Figure 14: Segmentation of the mechanical contracting market, 2013-17
                                    • New construction
                                      • Figure 15: Segmentation of mechanical contracting from new construction projects, 2017 (£ million)
                                    • R&M demand
                                      • Figure 16: Segmentation of mechanical contracting from R&M projects, 2017 (£ million)
                                  • Market Forecast

                                    • Growth to continue
                                      • Figure 17: Forecast M&E contracting market, 2018-22
                                    • Growth from new construction and R&M
                                      • Figure 18: Forecast Segmentation of the M&E contracting market, by type of demand, 2018-22
                                    • Electrical to continue to lead market
                                      • Figure 19: Forecast Segmentation of the M&E contracting market, by type of work, 2018-22
                                  • The Impact of the Economy

                                    • GDP
                                      • Figure 20: UK GDP quarterly development, by sector, 2004-18
                                      • Figure 21: Forecast GDP development, 2017-22
                                    • Interest rates
                                      • House prices
                                        • Figure 22: Annual house price rates of change, by type of property, 2006-18
                                    • Market Trends

                                      • Brexit changes, or not
                                        • Sustainability gaining in importance
                                          • Building information modelling
                                          • Market Drivers

                                            • General
                                              • Figure 23: Construction output in Great Britain, 2013-17
                                            • New housebuilding
                                              • Figure 24: New housebuilding construction activity 2013-17 actual and 2018-22 forecast
                                            • New public non-residential
                                              • Figure 25: Public non-residential new construction activity 2013-17 actual and 2018-22 forecast
                                              • Figure 26: Segmentation of new public non-residential construction, 2013-17 (£ million)
                                            • New private industrial
                                              • Figure 27: Private industrial new construction activity 2013-17 actual and 2018-22 forecast
                                              • Figure 28: Segmentation of new private industrial construction, 2013-17 (£ million)
                                            • New private commercial
                                              • Figure 29: Private commercial new construction activity 2013-17 actual and 2018-22 forecast
                                              • Figure 30: Segmentation of new private commercial construction, 2013-17 (£ million)
                                            • New infrastructure
                                              • Figure 31: Infrastructure new construction activity 2013-17 actual and 2018-22 forecast
                                              • Figure 32: New Infrastructure output, 2013-17
                                            • Repair & maintenance
                                              • Figure 33: Housing repair and maintenance expenditure by sector 2013-17 actual and 2018-22 forecast
                                              • Figure 34: Infrastructure repair and maintenance expenditure by sector 2013-17 actual and 2018-22 forecast
                                              • Figure 35: Private industrial and commercial repair and maintenance expenditure by sector 2013-17 actual and 2018-22 forecast
                                              • Figure 36: Public non-residential repair and maintenance expenditure by sector 2013-17 actual and 2018-22 forecast
                                          • Companies and Brands – What You Need to Know

                                            • The Carillion effect
                                              • The green momentum
                                                • The skills issue
                                                • Industry Structure

                                                  • General
                                                    • Mechanical contracting
                                                      • Figure 37: Development of companies in plumbing and heat and air conditioning installation, 2012-17
                                                      • Figure 38: Structure of the companies in the plumbing and heat and air conditioning installation industry, 2017 (number of businesses)
                                                      • Figure 39: Segmentation of work undertaken in the plumbing and heat and air conditioning installation industry, by number of employees, 2017 (£ million)
                                                    • Electrical contracting
                                                      • Figure 40: Development of companies in electrical installation, 2012-17
                                                      • Figure 41: Structure of the companies in the electrical installation industry, 2017 (number of businesses)
                                                      • Figure 42: Segmentation of work undertaken in the electrical installation industry, by number of employees, 2017 (£ million)
                                                  • Competitive Strategies

                                                    • Selective bidding
                                                      • Diversification
                                                        • Facilities management
                                                          • Geographical
                                                            • Construction
                                                              • Market sectors
                                                              • Company Profiles

                                                                • The move to facilities management
                                                                  • Construction-owned divisions
                                                                    • Private independents
                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                        • Abbreviations
                                                                          • Methodology
                                                                          • Further Sources and Contacts

                                                                            • Trade associations
                                                                              • British Institute of Facilities Management
                                                                                • Chartered Institute of Building Services Engineers
                                                                                  • Electrical Contractors Association
                                                                                    • Electrical Contractors Association of Scotland
                                                                                      • BEAMA Installation
                                                                                        • Institution of Electrical Engineers
                                                                                          • Institution of Incorporated Engineers (IIE)
                                                                                            • Institution of Mechanical Engineers
                                                                                              • Joint Industry Board for the Electrical Contracting Industry
                                                                                                • National Association of Plumbing, Heating and Mechanical Services Contractors
                                                                                                  • National Inspection Council for Electrical Installation Contracting
                                                                                                    • Trade magazines
                                                                                                      • Building (Weekly)
                                                                                                        • The Builder (Bi-Monthly)
                                                                                                          • Connections (Quarterly)
                                                                                                            • ECN Electrical Contracting News (Monthly)
                                                                                                              • Electrical & Mechanical Contractor (Monthly)
                                                                                                                • Electrical Engineering (Monthly)
                                                                                                                  • Electrical Times (Monthly)
                                                                                                                    • HouseBuilder (11 issues per year)
                                                                                                                      • Local Authority Building and Maintenance (11 issues per year)
                                                                                                                        • Professional Electrician and Installer (11 Issues per Year)
                                                                                                                          • Public Sector Building (6 issues per year)
                                                                                                                            • Trade events
                                                                                                                              • INTERBUILD
                                                                                                                                • IPOT
                                                                                                                                  • IFSEC