In drawing up this illustrious list, it is important to recognise that we are covering 50 of the top clients, not the top 50 clients. Were we to have pursued the latter route, we would have ended up with a list dominated by infrastructure clients – by far the largest, simply because the sector lends itself to large firms. The scale of investment required results in a limited number of companies, or even a so-called natural monopoly. The best example of this is Network Rail, which is not just the largest infrastructure client but also the largest client of all.
In other sectors, low industry concentration results in a much larger number of clients – although again, this varies by sector. For instance, food retailing is highly concentrated at the top end, with a handful of companies dominating the market. Meanwhile, in the industrial sector there is a larger number of regular investors, primarily warehouse developers. Elsewhere, the commercial building sector has many key clients (corporations taking new headquarters, developers promoting mixed schemes), but few that invest large sums on a regular basis. In the leisure market, there are a few major players, although the majority of investment is undertaken by hundreds of smaller companies (cafes, bars, independent hotels and so on).
To strike a balance, therefore, the 50 companies listed in the following pages cover most sectors of the construction industry. Together they currently invest close to £22bn a year, the majority of which relates to the UK; the construction content of this total is at least £15bn.
An analysis of future capital investment plans reveals that of the top 50, about 25% (55% last year) are expected to raise expenditure during 2003/04, 41% (25% last year) will keep it level, and 33% (15% last year) are likely reduce it. The changes from last year are partly the result of the altered mix of companies, although it is fair to say the rise in the percentage expected to reduce investment can be linked to the weaker economic climate, particularly in the office sector. The other group of clients likely to reduce investment is energy companies, which have been hit by falling electricity prices and overcapacity.
Finally, in terms of procurement, most clients with ongoing programmes of investment use negotiated contracts, whether through partnering, frameworks or alliancing. Term contracts are widespread for maintenance. Design and build remains common with developers, many of which use it alongside other forms of contract. Traditional contracts are used by most clients for large projects, many of which fall outside the scope of framework/partnering deals.
We have been inundated with calls and emails enquiring about the 2003 directory – so here's hoping you find the second 50 top clients as invaluable as you did the first.
- Currently reading
Where the smart money is