Chris Cole, the chief executive of consulting engineer WSP, has warned that UK consultants will do more business overseas than in the UK within two years owing to the shrinking domestic market
His comments come as results from WSP and Turner & Townsend (T&T) show that firms are increasingly relying on revenue from abroad to supplement their earnings in the weak UK economy.
Speaking about the prospects for British consultants in two years’ time, Cole said: “All of them will be more out of than in the UK.”
He said the private sector was unlikely to recover in time to support companies suffering from cutbacks in government spending.
“It won’t get there in time, not the way the government is going about it at the moment. They didn’t know what they were doing with the schools.” The last remark was a reference to the decision of Michael Gove, the education secretary, to cancel the the previous government’s £55bn Building Schools for the Future programme.
WSP’s revenue fell from £376.9m to £354.4m in the year ending 30 June 2010, and pre-tax profit was slightly down from £17.2m to £17m.
Last year the company’s turnover in the UK was almost the same as in mainland Europe, but in 2010 WSP has brought in almost £20m more from Europe than it has in Britain.
Meanwhile, T&T posted a drop in revenue of 11.4%, declining from £245m to £217m to the end of April this year; profit was up from £15.3m in 2009 to £17.8m this year.
The company generated 42% of its revenue overseas this year, compared with 40% last year, with the firm’s Australian arm growing by 27%.
Vince Clancy, the chief executive of T&T, said the company aimed to grow overseas revenue so that it topped UK turnover in two to three years’ time.
“The diversity of the business has helped us through this period. We have extended our group footprint into South America,” he said.
Richard Steer, senior partner at Gleeds, agreed that by 2012 most UK consultants would take most of their business from overseas.
“This is because the UK will have declined so much,” he said.