Projects are being frozen, or spending longer on the drawing board, as clients prove reluctant to start on site during uncertain economic times.
Ian Parfitt, senior partner at quantity surveyor RPA, which has an office in Bristol, says the commercial sector has been particularly affected by the cautious mood in the West Country. He says: "Our work rate has slowed dramatically. We haven't actually lost any orders, but projects are taking much longer to go live, as clients wait to see if the talk of recession actually affects their business."
Some contractors say the planning system is to blame for holding up major projects: the £400m redevelopment of the Broadmead shopping centre in central Bristol is still awaiting the green light, as is the long-standing proposal to revamp Plymouth city centre. On the positive side, the redevelopment of Princess Hay near Exeter is expected to win planning permission soon, and work on the £60m Meteorological Office in Exeter is due to start on site.
The health and defence sectors are buoyant, says Roger Coles, director of major contracts at Bristol-based Pearce Construction: "We're seeing more work come through for these sectors, as the effects of increased government spending kick in."
The residential sector is strong, and developer Crest Nicholson is proposing a £250m mixed-use development for Harbourside and a £180m mixed-use development for Portishead, north of Bristol. The developer expects to seek planning application for early 2002 for the Portishead scheme.
But Coles says the region suffers from a lack of investment in infrastructure. He says, "We're yet to see major infrastructure PFI projects get under way in the South-west, and transport connections south of Bristol remain weak." VM
How much is a pint of lager? £2.60
How much does a graduate QS earn? £20,000-24,000
umbrellas are out as the Irish skies darken. But it is not raining yet. Construction output fell to a mere 1% this year, from an average of 11% for the past seven, according to the Construction Industry Federation, and the commercial and housing sectors look shaky.
Michael Webb, a partner at Dublin-based quantity surveyor Patterson, Kempster & Shortall, says: "Private housing growth was static at the beginning of the year and has taken a nosedive since. The commercial sector has fallen, too, from a position of strength to zero growth."
His colleague, partner Donn O'Shaughnessy, blames the decline in the commercial market on banks' caution: "They've been out of the market for the last six to nine months – they won't lend on a scheme unless it's pre-let."
However, if Irish construction has a saviour, it is the public sector. The National Development Plan, an infrastructure programme that involves roads, bridges and waterworks, means several £100m PPP projects are in the pipeline, including dual carriageways from Dublin to Waterford, Cork, Limerick, Galway and Belfast.
Some farmers are refusing to sell their land and the programme is reported to be running six to nine months behind schedule, but there is more worrying question mark over funding. A predicted £4bn government surplus has proved to be £1bn after a dramatic fall in tax revenue. The government has committed itself to the NDP, but education and healthcare spending is uncertain. The budget is due in early December and the word on the street is that education will be hit.
On the upside, the slowdown has helped to ease the skills crisis. Webb says: "We have been overheating, but the downturn in housing has released a number of people back onto the market."
He does not see this as a bad thing: "In a sense, it's a welcome downturn as there has been double-digit growth for the past few years. It gives people a chance to catch up." TL
How much is a pint of lager? £2.50
How much does a graduate QS earn? £25,000
Sunshine, some clouds later
In the south-east, work is booming at the moment, but clouds are gathering on the horizon.
Brian Bartholomew, a partner at QS Davis Langdon & Everest's Portsmouth office, says: "There is an expectation there will be some sort of downturn, particularly in the leisure and office sectors. However, the health and education sectors are still busy."
John Homer of Try Construction takes up this theme: "There has been a slowdown in the commercial sector but the public sector is very buoyant as a result of the government's spending plans filtering through, particularly in the health and education sectors. This more than compensates for the fall-off in the commercial sector."
Try Construction is busy on a new library for the Open University in Milton Keynes, and has secured three health and education projects during the last quarter.
Business in the housing sector is still brisk, despite scare stories about a slowdown in house price rises. Architect Damian Bree, of Bree Day Partnership, works on public and private housing projects. He says: "I don't think housing has been affected as there is government support for public housing and low interest rates on the private side."
The biggest problem currently facing construction in the South-east is not a recession but the planners. Nick Lomax, of architect Lomax Cassidy & Edwards, says: "There are endless assessments and audit reports – you have to speak to every officer known to man. This all puts people off, so they end up staying in their existing buildings." The firm is busy, working on a £34m mixed-use scheme in the centre of Brighton, which includes a new library, a hotel, housing and shops.
Skills shortage are still a problem. "Even if construction does go wobbly, the skills shortage will be an issue," says Tim Carpenter, managing director of Willmott Dixon's housing arm in the Eastern region. To ease the pressure on skills, the company is making extensive use of prefabrication. Try's Homer says this is an area that his firm, too, will have to explore if the skills crisis continues to bite. TL
How much is a pint of lager? £2.30-2.50
How much does a graduate QS earn a year? £20,000
Overcast, chances of frost
Between bad news in the business press and a lull in the investment market, the outlook in London is increasingly gloomy. Agents and architects report a business-as-usual mentality but have their fingers crossed. Architect Steve Quinlan of Denton Corker Marshall says: "We're still optimistic but there are a lot of apocryphal stories. If people go quiet you tend to assume the worst – and people are going quiet about investment decisions. There's an anxiousness and an anticipation that things might get worse before they get better."
Work for telecoms, dotcoms and office fit-outs has slowed considerably. "Clients did freeze in this area," says Matthew Nowell, senior consultant at architect recruitment firm Adrem, "and we think it's going to be quiet for the next five months."
Despite the question mark over the commercial sector, current projects are still pushing ahead. Big schemes include the burgeoning office district at Paddington and the latest phase of Docklands. There are also impressive regeneration developments at Silvertown in the east and around Battersea Power Station in the west.
Despite the debate over tall towers, industry insiders say there are firm plans for more skyscrapers. Rather than adding up to a boom, however, this work should be seen as "a stabilisation after the continuous workload of a year ago", according to Ken Shuttleworth of Foster and Partners.
Propping up a potential slowdown is public spending. Colin Wyatt, senior partner of quantity surveyors Gardiner & Theobald, sees this investment as the light at the end of the tunnel. "Public spending is maintaining the balance of work and this will be a major offset to other problems. The only blip here is transport, but there is no doubt that mega-money is going to be spent. I think this will save us from recession." SB
How much is a pint of lager? £2.70
How much does a graduate QS earn in a year? £18,000-22,000
Cloudy with sunny intervals
The outlook for East Anglia is unsettled. As long as companies steer clear of commercial work, construction prospects are a little sunnier than they seemed a few months ago, but the downturn in the US stock market is starting to bite.
Lawrence Brett, partner at the Cambridge office of DL&E, sums up the region's mood: "Last March, the NASDAQ [American IT share index] wobble put many American schemes on the back burner. But now things don't seem quite so dreary and gloomy – except in office projects.
"Several office schemes are coming up to completion in Cambridge, and this has saturated the market. One American IT company, Wordpay, has said it might not move into its new premises. All this has taken the heat off the market. Contractors are certainly hungrier and phones are busier."
Multidisciplinary practice RMJM is one of the firms that have suffered from a slowdown. It has laid off five architectural staff at its previously 20-strong Cambridge office. Last month, it lost a project to refurbish one of US drug company Pfizer's buildings in Sandwich, Kent, with the client citing the 11 September disaster as the reason. "There's also a lot on hold at present," says Mike Finch, who is in charge of RMJM's Cambridge office.
In contrast, Sindall, the East Anglian subsidiary of Morgan Sindall, has tripled in size in four years, and its managing director, Julian Brandon, even suggests: "It's time to take a breath now. Many people have been talking about a dip, but we're not seeing it. The key thing is that we're not involved in spec commercial work, but we are in enough other sectors – universities, education, health and social housing."
Cambridge University, the region's main construction client, continues to steam ahead with projects worth a total of £528m in the pipeline. But even the university is not immune to the dotcom collapse. Its £14.5m Marconi building project in west Cambridge, designed by TP Bennett and let to Shepherd Construction, has been put on hold after the commercial collapse of its high-tech funding company. MS
How much is a pint of lager? £2.20
How much does a graduate QS earn in a year? £16,000-17,000
Warm and sunny
Public sector work is keeping the skies bright in Scotland. Contractors are contemplating the UK's largest PPP deal, the £1.2bn Glasgow schools education scheme, and the Scottish executive last month hinted that it is to put together a £500m PFI deal for the development of three prisons.
In Edinburgh, the £200m Royal Infirmary is complete and the Holyrood parliament saga looks to be finally coming to a close. Syd Patton, chief executive of employer's body Scottish Building, believes the amount of public work to be completed will keep order books healthy. He points to the work to be generated from local authority housing stock transfers as an example of where billions of pounds worth of improvement contracts may begin.
"There is a small downturn in Scotland for commercial work, but the long maintenance contracts that accompany public work should keep the industry healthy," he says. The public sector is also maintaining architects who specialise in that area, with a good flow of orders expected for the next 10 years. The dog in the manger, of course, is skills shortages. A spokesperson for Glasgow-based Keppie Design said the practice was being kept very busy by the huge amount of Scottish public sector work.
Architects who cater to the commercial sector are less sheltered, and some practices are beginning to lay staff off. Keppie have picked up some employees from the Glasgow offices of HLM architects after it announced that it was shedding 10% of its people. TB
How much is a pint of lager? £2.00
How much does a graduate QS earn? £20,000
Fine but cool
The forecast in Manchester is mixed. the construction market seems fine, but a 10-year development plan at Manchester airport has been frozen for two years because of the New York disaster.
Russell Gagg, an architect at Manchester-based Stephenson Bell, said the market within Manchester was buoyed up by the booming residential sector. He said his practice was working on designs for the £50m redevelopment of the Old Smithfield fish market in the city centre's northern quarter for developer Ician.
The whole of Manchester city centre resembles a building site because of the amount of work being carried out there. The city's plans include the UK's biggest judicial project since 1870, a £55m courts complex, and the first PFI housing regeneration project is to get under way after months of delay.
Teams led by contractors Gleeson, Carillion, Bramall and Mowlem have submitted bids for the £90m of refurbishment for two estates in Plymouth Grove and Stockport Road.
In Liverpool, regeneration is still the order of the day. Liverpool Vision, one of the UK's first regeneration companies, has promised to pump more than £1.5bn into the city centre. In addition, regeneration strategies and partnerships are being promoted by Liverpool council, local housing associations and other public sector organisations.
Bill Maynard, director of Liverpool-based architect Urban Splash, said: "We think the residential market is strong in Liverpool. There is steady demand and values have increased significantly." TB
How much is a pint of lager? £2.20
How much does a graduate QS earn? £19,000
A chill in the air
THIS is a region normally immune to the sort of boom–bust cycles seen in the South-east, but a spate of recent knock-backs has brought a cold spell.
"There are signs of a recession," says Kevin Drysdale of QS Drysdale Southern Partnership. "We've had a couple of projects put on hold, and another, the Whitley Bay Shopping Mall, waiting for pre-lets before developers press the button."
Drysdale blames the problems on the recession in America and the events of 11 September. He says one project that had the brakes applied to it was a commercial development for a US company that produces cable-laying equipment.
Fears are also growing that the bubble might be about to burst in the UK's call-centre capital, with recent announcements by One2One of impending job cuts. However, Drysdale dismisses this as scaremongering; his firm is working on a £16m call-centre project in Peterlee.
The outlook is not all dark. One consequence of an impending recession is that some projects "have been brought forward while the region's economy is still buoyant, just to beat a longer-term dip", according to Gary Lockey, a partner in DL&E's Newcastle office.
Manufacturing has been hit hard, but the residential sector remains hot, with property values still on the up. Architect Napper Partnership is waiting to hear whether the £12m redevelopment of an old warehouse into 137 apartments on Newcastle's booming Quayside will be given the go-ahead by planners.
One sure sign that the industry is not yet in crisis is that tender prices are still high. "Prices can fluctuate by up to 50% or even 100%, which means there is no shortage of work," says George Penrice, of QS Sanderson Townend & Gilbert.
Newcastle and Gateshead's bid for City of Culture status means that the government and local councils are still pumping reasonable amounts of money into the area.
"There are quite a few large schemes in partnership with the private sector," says Lockey. AP
How much is a pint of lager? £1.50 in a working men's club in Gateshead or £2.50 on the Quayside in Newcastle
How much does a graduate QS earn? £13,000-16,000
Yorkshire and Humberside
Foggy, scattered showers
A touch of foggy uncertainty is starting to creep into Yorkshire and Humberside. Although on the surface workloads are ticking over nicely, there are signs all is not well.
"Things are bubbling away here, but there seems to be uncertainty after 11 September," says QS Peter Beard of The Monaghan Partnership. "Having said that, there are still lots of projects around – it's a strange time," he adds.
Good employment levels and retail spending are helping to counter this uncertainty and demand is still strong for office space, including speculative developments. "Leeds and Sheffield still have a shortage of quality office space so things are buoyant and we're hoping that it won't decline," said Beard.
Residential developments are also healthy, as inner-city living catches on in Leeds and Sheffield. Low interest rates are expected to keep demand strong even if prices fall.
It is hoped an expected increase in public spending will make up for any decline in other areas. For example, Mowlem has won a £35m PFI deal to improve seven schools in Leeds.
But the continuing labour shortage is a big concern for the region, and it is not just tradesman such as carpenters, plasterers and bricklayers who are hard to find. David Bishop, managing director of QS David Bishop Associates, says: "Surveyors, architects and engineers are also in short supply. The big urban centres are sucking up the labour market." This has helped to raise the salaries of QSs from £18,000-21,000 last year to £21,000-24,000, plus benefits, this year. GJT
How much is a pint of lager? £1.90
How much does a graduate QS earn? £21,000-24,000
the outlook is brighter in some parts of this region than others. Large regeneration schemes in Nottingham and Derby and the planned redevelopment of Leicester are helping to maintain confidence in the East Midlands construction industry. But in the south of the region, signs of a recession are emerging and companies are holding their breath in case the work dries up.
In Nottingham, the construction of large mixed-use private developments as well as government-funded projects are surging ahead. There is a lot of activity along the canal, including a large residential redevelopment at the Hickling Brothers factory. The £45m National Ice Stadium is acting as a catalyst for redevelopment in the nearby Sneinton district, and the deprived north-west of the city is expected to get a boost from the completion of the £180m, 23-station Nottingham Express Transit Light Railway in 2003.
"It's encouraging that everybody in the area is so optimistic," says Alan Baker of QS Gleeds. "One of the most positive indicators is the position of the middle-order commercial developers," he says. "They're the ones who rapidly disappear at the start a recession but they're buoyant at the moment."
The views of David Morris, director of Tompkins Robinson Surveyors in Wellingborough, near Northampton, couldn't be more different. "There's a lot of activity on the social side, but we're very worried about the private sector," he says. "All speculative and private work seems to be put on hold at the moment, and that includes three housing projects in Northampton." Morris is grateful for government spending on schools, hospitals and social housing. He is confident that this will carry his firm over if the private work dries up.
There are signs that Leicester is feeling the chill. It lags behind Derby and Nottingham in terms of government-funded redevelopment projects and the construction of the Marriott Hotel has been put on ice. AS
How much is a pint of lager? £1.90
How much does a graduate QS earn? £20,000-24,000
The west midlands is not nearly as full of sunshine as it was 12 months ago. With some major work completed, such as the £100m mixed-use Millennium Point scheme in Birmingham, and others on hold – Marconi has yet to decide on whether to go ahead with a £200m headquarters in Coventry – there is some degree of concern in the region. "Some contractors are competitively bidding on pretty suicidal margins, purely to get turnover right now," says Mark Bevan, business development manager at Birmingham contractor FJ Shaylor.
Contractors are already seeing the effects of 11 September. "The handbrake is firmly on," reckons M&E contractor Colmic EMS managing director Alan Armby. "We usually look at a conversion rate of job orders to jobs done of three-quarters.
It's early days, but that rate is now looking pretty poor." The slowdown, according to Armby, is being felt in the commercial and industrial sectors, especially among US clients or firms with US customers. There has also been an impact on commercial housing. Shaylor's Bevan claims that land deals, especially on inner-city developments, have been put on hold. "Supply of inner-city flats is outstripping demand right now," he says. "It's not exactly reached its saturation point, but it's getting there."
It's not all doom and gloom, however. Richard Graves, managing director at quantity surveyor Graves, thinks the area is still in healthy shape, pointing to booming public sector work in education, health, housing and prisons. Birmingham is planning to transfer 88,000 council houses, which should lead to a boom in repair and maintenance work. "We are still chipper," Graves says. "We do not have the depressions of the South-east." The slackening in commercial work has also eased the skills crisis in the area – although contractors still point to a lack of skilled carpenters and a lack of professionals, such as engineers, QSs and architects. PC
How much is a pint of lager? £2.50
How much does a graduate QS earn a year? £15,000
Warm and bright
Work keeps piling up for contractors and architects in a construction sector proving unaffected by recent wobbles in the UK economy. Ken Haines, chairman of contractor Fifehead, based in Cardiff, says demand is particularly strong in the office, retail, hotel and health sectors. "I've not noticed any downturn in our order book, although the industrial sector is less busy these days," he says. Fifehead is on site with a £6.5m refurbishment scheme for the Royal Hotel in Cardiff, and expects to start on two similar schemes in the near future. Also in Cardiff, BT has got the go-ahead for a £35m data centre designed by architect Holder Mathias Alcock.
The leisure sector is also active. One Cardiff-based QS says a well-known developer is proposing a £100m leisure park for a site in south Wales, while Fifehead is about to sign up for a £10m hotel scheme. The £92m Welsh Millennium Centre is finally due to start on site early next year with main contractor Alfred McAlpine.
In contrast, there is little PFI work around, although local authority Rhondda Lynon Taff has invited bids for a £26m PFI life-long learning centre.
Meanwhile, the Welsh assembly's proposed debating chamber remains a pie in the sky, and Cardiff council's Sports Village is only just about to go to planning after three years of proposals.
Hot gossip topics include whether the Welsh assembly can find a developer to take forward the proposed debating chamber, and the departure of Euan Cresswell from his post at housebuilder Berkeley Homes as regional director for the South-west.
Contractors' main complaints concern the continuing shortages of tradesmen in the region, including plumbers, plasterers and bricklayers. Experienced QSs are also in demand. VM
How much is a pint of lager? £2.20
How much does a graduate QS earn? £16,000-18,000