Leading player says decline is linked to fall in commercial office deals – and no upswing is in sight until 2004.
The construction management market is in decline and will not revive until 2004, according to Mace, a leading player in the sector.

The company, which built up its reputation in this line of work during the 1990s, blamed the lack of demand for commercial offices for the ebbing market.

Bob White, chairman of Mace, said he had detected the start of the decline two years ago.

He added that the present level of demand for straight construction management work was very low. "There is the occasional arts project or fit-out or new-build job for corporations, but not much.

"Obviously, we are ready, willing and able to move back when it comes back, but we don't think it will for a year to 18 months."

One of Mace's rival in the sector agreed with White's analysis. He said: "The marketplace is turning away from straight construction management, especially for large projects."

Despite the decline in demand for its core service, Mace continued to grow last year. Its turnover rose from £65m to £90m for the 12 months to 31 December 2001 and pre-tax profit increased to £1.6m from £1.01m in 2000.

White said the firm had responded to the decline by expanding into other markets, such as local authority outsourcing work and urban regeneration.

The company won an outsourcing contract with Hertfordshire council last month and bought Manchester regeneration specialist C2C in September.

White said: "The Hertfordshire contract is the sort of business we are working quite hard at being in. C2C has proven itself already for us."

Mace is increasing its geographical coverage. It has opened an office in Milan that will focus on retail and leisure projects.

The firms was the subject of a management buyout last year, led by White, a founding director, with 12 of his colleagues.

At the time, White upped his stake in the firm from 20% to 40% and pledged to stay for at least five years.