Although the powerhouses of Wales and the South-west – Cardiff and Bristol – continue to prosper, life is something of a struggle in other parts of the region.
The big news in Cardiff is the attraction of US financial giant Bank One to the city. A 1.9 ha waterfront site has just been found for its new headquarters in Cardiff Bay. Also in Cardiff, the £70.6m Wales Millennium Centre designed by Percy Thomas Partnership is currently being tendered but there is a question mark over funding for the much-delayed scheme. As one contractor says: "It's got funding all right – the only question is how much."
There is a fair degree of work out there – what we need is for clients to have the confidence to go ahead with it
Clive Wood, business development director, Bovis South West and South Wales
In Bristol, speculative office developments are being built for the first time since the 1980s as the West Country economy heats up. Bristol City Council is behind a plan to construct a £400m distribution park on derelict land in Avonmouth.
The story is very different in Cornwall, which is set to qualify for European Union development aid as a deprived region. Locals say it is suffering from a lack of investor confidence. And English Partnerships is still searching for a developer to back the £60m redevelopment of the Royal William Yard in Plymouth after MEPC pulled out.
We had a partners’ meeting for everyone in the South-west last week and everyone was saying the same thing. We are very optimistic
Jim Leighton, partner, Davis Langdon & Everest, Cardiff
Graham Lobb of local architect Form Design says: "It is still very patchy here. Whatever construction boom there was in 1998 bypassed Devon and Cornwall."
Life is pretty hairy here, and has been for a while. I don’t see it getting any better until at least 2000
Graham Lobb, architect, Form Design, Plymouth
Cambridge is still riding a wave of science and technology investment that has earned it the monicker "Silicon Fen". At least 185 900 m² of science-park space is coming on stream in the near future, the main sites being Cambridge Research Park, a joint venture between Carisbrooke Investments and Suon Estates to the north of the city; and Granta Park, an MEPC/TWI joint venture at Abingdon.
Cambridge University Estate Management and Building Services has a portfolio of projects worth £900m over the next five to 20 years. This includes a 160 000 m2 business park west of Cambridge. On top of this, the estates department will find out this summer whether it has won bids for £173m worth of science laboratories from the Joint Infrastructure Fund, a Wellcome Trust and Department of Trade and Industry funding initiative for science laboratories.
Contractors are doing silly bids for contracts – cutting each other’s throats. You can’t add value like that. There are still too many contractors around
Stephen Bug, partner, Davis Langdon & Everest
Recession fears at the end of last year have completely evaporated, and firms report that they are busier than ever. "There seems to be a lot more activity than we thought there would be before Christmas," says Paul Coomber, a partner with Davis Langdon & Everest in Oxford.
The market is still buoyant. The university has major bids in to the Joint Infrastructure Fund, so you can see 12-18 months ahead in the market now
Jack Lewry, director, architect The RH Partnership
The breaking of the private finance initiative log-jam in healthcare projects, together with a series of new business parks and shopping centres, is providing a rich seam of work in the area. Three major business parks are planned around Reading.
Quantity surveyors say recruiting new graduates and staff with a few years' experience is proving harder than ever, but an oversupply of firms is keeping fee rises at bay. Tender costs, too, are not rising steeply, with annual inflation at about 4%. But mechanical and electrical contractors are still in short supply.
It’s impossible trying to recruit good 28-to-35-year-old people who can be relied on to run projects
Paul Coomber, partner, Davis Langdon & Everest, Oxford
Oxford University is in cautious mood, but hopes to receive a boost from the new Joint Infrastructure Fund. New student accommodation from Oxford Brookes University is also in the pipeline.
Firms based in the area are also benefiting from the buoyancy of the London market.
We’re very confident. Any signs of an impending recession haven’t appeared. There seems to be no prospect of a downturn
Phil Jones, senior partner, Ridge and Partners, Oxford
Scottish contractors and consultants are in rude health following last year's jitters, which were prompted by the slowdown in manufacturing, and in particular by semiconductor giants pulling the plug on major projects.
The outlook is good, but we will have concerns about skills shortages if growth continues
Sid Patten, chief executive, Scottish Building Employers Confederation and the Scottish Housebuilders Association
Consultants say that semiconductor manufacturers are back in the country talking about projects that might happen by the end of the year. On a smaller scale, demand for business-park offices is high, with at least half-a-dozen projects on site in Edinburgh alone.
Devolution is still driving the Edinburgh market. Land prices are "going through the roof", says Sid Patten, chief executive of the Scottish Building Employers Confederation and the Scottish House Builders Association. Housebuilders are doing well throughout Scotland but they are not as optimistic as they were last spring.
I have fears that the market will be less healthy after the elections in May. The Scottish parliament will interfere too much with business
Victor Hamilton, partner, Parr Partnership
The commercial market is holding up well. In Edinburgh, the Scottish parliament is driving demand for office space for lobbyists, media groups and consultants. In Glasgow, about six major companies are looking for new offices, including Scottish Enterprise. Retail demand in Edinburgh is also strong: a £200m scheme has been proposed above Waverley Station, and developer EDI is waiting for the outcome of a public inquiry into its £100m shopping mall beneath Princes Street.
The private finance initiative is booming, with nearly £200m of schools up for grabs. The largest bundle is an £80m deal for Edinburgh schools that will be decided later this year. Public sector capital spending in Scotland was boosted by £160m in the budget. It is thought that half this sum could be spent in construction.
We are seeing inflation in M&E tenders. It’s up about 5% on last year. Otherwise, inflation levels are minimal
Hugh Fisher, partner, Davis Langdon & Everest
Despite the health of the market, tender-price costs in Scotland are low. The RICS says that tender prices have risen 1.5% compared with a national average of more than 5%. But local QSs warn that prices are rising 5% in M&E packages.
I think the market is healthy at the moment. A range of different sectors are generating work and more opportunities are coming through
Doug Pilkington, architect director with BDP in Northern Ireland
Despite the political problems facing the newly elected Northern Ireland Assembly, most contractors believe the peace process is still delivering investment to the region.
Contractors and consultants point to the continued expansion of blue-chip clients such as Sainsbury's and Tesco into the area as evidence of client confidence in Northern Ireland. Further proof arrived in the shape of February's announcement of plans to build a £30m terminal at Belfast City Airport. The scheme was designed by BDP, one of a number of large UK companies with offices in the province.
There are still a few bridges to cross, but we’re confident that once the National Assembly is up and running, it will bring in more investment to boost construction in Northern Ireland. We’re looking forward to better times here
John Robinson, manager, Laing, Northern Ireland
Belfast's £90m lottery-funded Odyssey Centre is at last on site with joint-venture contractor Farrans/Gilbert Ash, and the redevelopments of the Causeway Hospital in Ballymoney and Altnagelvin Hospital in Derry, worth about £43m each, are due to be finished this year.
Private finance initiative projects in the pipeline include a £30m cancer centre at Belfast City Hospital and a £22m redevelopment of Belfast's Royal Courts of Justice.
The market is relatively flat in the Midlands, aside from major retail and leisure schemes in Birmingham which are finally coming on stream. Once they start, it will be a watershed for firms in the region
Richard Lumby, Tarmac regional director
A Royal Mail distribution centre in Mallusk is out to tender, and work on the Laganside development is continuing with a number of apartment schemes.
Retail is going through a stabilising period. Everyone is waiting to see the impact of the Trafford Centre
Frank Joyce, regional manager, Tarmac
Birmingham excepted, "flat" is the word most frequently used to describe the Midlands market. Most contractors and consultants report a similar level of enquiries to this time last year – enough to keep them ticking over. There is still pressure on fees from commercial clients. As Cliff Bryant, managing director of Lincoln contractor Simons, says, margins are "good value for clients".
Manufacturing is still depressed and work is hard to come by in the sector. Locals are particularly worried about the car industry but, despite the gloom, a number of retail and leisure schemes are on the cards. Nottingham's old Evening Post building is the site for a £25m leisure scheme proposed by Wilson Bowden. Work on Nottingham City Council's £30m Ice Centre continues apace, and developer Hermes' £30m-40m extension to the city's Broadmarsh shopping centre has been granted outline planning permission.
Millennium projects are being chased by national contractors, and medium-sized schemes are being hunted down by good, smaller players
Simon Tonge, director, MDA
In Derby, a £15m upgrade of the Eagle Centre shopping mall has been given the go-ahead, although it will be subject to further inquiry by local planners.
Leicester's National Science Space Centre, a £46.5m Millennium Commission-funded project, is due to start on site this month. Morrison will carry out the phase-one enabling works. Work on phase two starts in September, for completion in February 2001.
Skills shortages and tender-price inflation are not causing headaches yet, but with a construction boom predicted in Birmingham, there could be some pain ahead.
The Manchester market is buoyant, although it hit a sticky patch last autumn when some projects went on hold briefly. Clients appear to be regaining confidence, and the hotel and leisure markets are looking particularly healthy.
The council wants to see a dramatic improvement in city-centre hotel space for the Commonwealth Games, and a range of proposals have come forward in the Deansgate area.
Work will start on the Commonwealth Games stadium by July. The city council is also working with developer Allied London to promote a huge development in the under-used Crown Square area off Deansgate, near Granada Studios.
BDP is working on the Crown Square project, and a planning application for 200-300 homes and more than 50 000 m sq of offices is expected shortly.
In Liverpool, approvals are now in place for the £100m Chevasse Park lottery project, to be built by Morrison.
The expected downturn in work in the North-east has not materialised. Construction work in Tyneside, Teesside and Humberside is on the up, and work in Leeds and Sheffield is steady, says Roger Mansell, regional director of HBG. In general, contractors are "cautiously optimistic" about the short-term future.
Private finance initiative projects feature strongly in the North-east, with an £80m PFI hospital for Newcastle going out to tender in the summer. The North-east's Regional Development Agency will be formed on 1 April. It should stimulate the region's manufacturing industry with a consequent spin-off for contractors.
The leisure and retail sectors remain strong throughout the North with a rash of hotel and cinema developments under way or in planning, including a new 250-bed Hilton International in Gateshead, due to open late 2000.
Skill shortages have not materialised in the region, although there is a general concern among contractors about the quality of labour.
In the Don Valley, development work is continuing for the £7.3m, English Partnerships-backed project to create flats, offices and leisure facilities at a former cutlery factory.
- £400 Bristol City Council distribution park: Proposals announced
- £71m Cardiff £60m Millennium Centre: Out to tender
- £40m Bank One headquarters in Cardiff: Site chosen
- Granta Park business park: Includes a £12m headquarters for Chiroscience and a £6m office for Ribotargets. Other offices in the pipeline
- 160 000 m sq business park for Cambridge University’s estate department including a £12.5m research laboratory for Microsoft: Awaiting planning decision
- £150m Cambridge business park for Development Securities
- £200m Green Park, Reading: Prudential is developing a 209 000 m sq business park
- £60m Royal Berkshire Hospital Reading: The non-PFI scheme is being built in three phases. The first is on site; the £28m second phase is about to go to tender
- Reading International Business Park: Akeler has plans to develop a 37 000 m sq business park
- £200m retail scheme for Waverley Station, Edinburgh: Proposals ready
- £120m Guild Street retail and entertainment centre, Aberdeen: Planning gained
- £80m Edinburgh PFI schools: Bids being prepared
- £30m Belfast City Airport terminal: Proposal announced
- £30m Belfast City hospital PFI: Bids being prepared
- £20m Mallusk Royal Mail distribution centre: Out to tender
- £25m Nottingham cinema and leisure development: Proposals announced
- £30m-40m Nottingham Broadmarsh shopping centre extension: Planning permission gained
- 48 000-seat Commonwealth Games stadium, Manchester: Contractors shortlisted, work to start this summer
- Urbis regeneration project: Ian Simpson-designed, lottery-funded city-centre regeneration scheme now out to tender
- £80m PFI hospital extension, Newcastle: Set to go to tender summer 1999