More than one in 10 consultants are surviving on margins of less than 3%, according to Building’s 2010 survey of the top 250 consultants
The proportion reporting these margins is 11%, up from 7% in 2009, whereas those reporting margins of more than 8% fell from 52% to 43%.
Margins are likely to be squeezed even further by cuts to public sector spending because 42% of firms rely on the state for more than half their fees.
More broadly, the survey points to a growing discrepancy between staff levels and workload. Martin Hewes, the economist who carried out the survey for Building, says new work is back to 2003 levels, but staff numbers are 28% above what they were seven years ago.
This is despite a wave of job cuts following the beginning of the financial crisis in 2007. Atkins has lost more than 40% of its UK chartered staff in the past three years, shrinking from 6,340 in 2007 to 3,625 this year.
However, only 10% of respondents said they were planning to cut staff levels, and 38% said they would take more employees on. Just 1% said they would cut salaries, and 23% said they would increase them.
Atkins topped the main table for the third year running, based on the number of UK chartered staff (3,625). It was comfortably ahead of nearest rival Mott MacDonald (2,555). Atkins also outstripped Mott MacDonald in fee earnings, bringing in £998m.
Turner & Townsend claimed the top project managers’ spot with 613 non-support staff, edging out Mott MacDonald which was number one last year.
There was little movement among the top engineers, with Atkins heading the table with 2,490 engineering staff, although Arup (1,202) leap-frogged rival Halcrow (1,151) to move from 8th to 4th place.