Outlook: Sunny

1. MOVE TO BIRMINGHAM

Forget the sexy South. For the first time in more than a decade, the construction workload is starting to spread right around the country. Researchers at Construction Forecasting Research think that between 2002 and 2004, south east England, excluding London, will show the poorest growth of the whole country. And it pinpoints north west England, Yorkshire and Humberside, the East Midlands and Devon, Cornwall and Somerset as areas where construction output is likely to increase significantly. At construction recruitment agency Hays Montrose, the Birmingham and Glasgow offices are hoping to do some brisk business. Regional director Adrian Basu flags up the continuing work on the Bull Ring shopping development and the ringroad, new-build projects in Digbeth and the Birmingham Relief Road. “There are still specific skill shortages for quantity surveyors, civil and structural candidates, CAD technicians, project managers as well as general labour and trades,” says Basu. In Glasgow, there is big demand in the housing sector and in PFI/PPP. “I can name 13 companies I’ve spoken to in the last three weeks that would happily take on people with PFI/PPP experience in either hospitals or education,” says Neil Crossan, senior manager at Hays Montrose.

2. GO PUBLIC

Go and get some experience in the public sector. The government will be by far the biggest employer next year with a combination of Defence Estates, NHS and education jobs all coming along. There will be work to suit every size, ranging from the mammoth PFI hospitals like £150m Havering Hospital in Essex, to the refurbishment of secondary schools. The private commercial side is on the wane. Every private sector apart from retail has shown growth of less than 20 per cent over the past year, compared with growth rates of 45 per cent for education and 33 per cent for public infrastructure work, according to the DTI. The sorts of sums we are talking about for the public sector are huge: Defence Estates boasts a £1.5bn a year construction budget; £2.8bn this year is earmarked for health, excluding PFI; in education there are plans to spend up to £45bn over 10 years to build and improve schools. This equates to a total of £8.8bn. DTI figures show that in 2000, the total for public work excluding housing and infrastructure came to £4.75bn. For the 12 months to September 2002, that figure was £4.93bn. These are figures on paper, however. The concern is that the government does not spend the cash it has earmarked. Construction Products Association economics director Allan Wilèn points out that the government is failing to hit some of its own targets. It wants 100 new hospitals by 2010, but only two out of the six planned new starts were achieved in 2001/2. The other downside with PFI or PPP deals is that tender costs can be exorbitant and that you may find yourself dealing with naive clients. This process is being gradually improved, but, for now, patience will be necessary.

3. Become a quantity surveyor...

At last it’s good to be a QS. Wherever you live. Hays Montrose says that QSs can expect the biggest rises in salary because there aren’t enough of them. Project managers can also expect to be well looked-after in the salary and benefits department, since there will be plenty of projects on the go next year. For the rest of you, the news is less good. Salary increases slowed last year (average 3.06% says Hays Montrose) and they will probably continue to do so. This is against inflation forecasts, which could rise from 2.5 per cent at the beginning of this year to 3.25 per cent by the end. Worst off in pay rise terms, says Hays Montrose, will be engineers, whose salaries peaked in 2002 and buyers, whose responsibilities are being taken over by QSs. ...OR STUDY LAW
There’s always work for our colleagues in the legal profession, but the next few years look particularly juicy. Recent rulings saying that disputes should be kept out of court if possible won’t really hurt as ‘alternative dispute resolution’ such as adjudication and mediation requires the services of a lawyer or perhaps a QS with legal expertise. And the silver lining for the lawyers in the demise of the huge private office sector is that developers with construction overruns and without tenants may very well try to claw back some of their losses through litigation. “On commercial developments we have seen an increase in disputes,” confirms Masons partner Alistair Morrison. And there is the fallout as firms in the gap between private offices and public sector go bust. But law firms are really excited about PFI. One contractor that has been bidding for £20m PFI hospitals claims that the documents are enough to fill a boardroom. Law firms are gearing up for the paperwork, says Fenwick Elliot partner Simon Tolson: “Most lawyers who are canny are grooming for PFI, making sure everything is ready to go.”

4. GET A HEALTH CHECK

It’s the start of a new year, some suppliers have already gone to the wall, so it’s about time you took stock. Mason partner Catriona Dodsworth recommends: “On major projects, my advice is to stop and do a health check on all your suppliers. It just might be prudent. When materials are being procured from all over the world it always makes sense to do a financial check-up.” Make sure that equipment – such as expensive mechanical and electrical kit – is ringfenced to your job, she adds. A note of caution though: if you do think that someone you deal with may be about to go bust, proceed with extreme care. Making enquiries about finding a replacement supplier before anything has happened could potentially leave you in legal hot water, since it can be taken to mean that you were intending to break your contract with the supplier.

5. CLEAN THE TOILETS

It looks like you will probably have to pay more for good quality operatives, and you may even have to provide a clean canteen. Or you could carry on as normal and watch while workmanship slides. Despite the slow-down in the commercial office market, there will be competition for labour. In the South East, Wembley Stadium and Terminal 5 at Heathrow will soak up a lot of men. Out in the regions, health, education and defence jobs will be vying for muscle. The roads programme and other infrastructure work will also be taking potential operatives away from the building sector. UCATT general secretary George Brumwell welcomes the competition and adds: “I think that the big players are going to reduce in number and that’s going to be very helpful.” At Heathrow BAA will force its contractors to be nice to the workforce, who will get set hours, holiday pay, direct employment and occupational health-screening. Will this push standards up across the industry? No. While the top jobs are creaming off the best-skilled labour, the bottom end will probably be relying on the cash-in-hand brigade with fewer skills and no rights. Health and safety is bound to suffer, even if the major contractors are pushing to improve. Not that there is any way of knowing, since accidents among the one- and two-man bands and illegal workers never find their way into the HSE’s statistics. This year will see pay negotiations between the unions and contractors. Brumwell says that he will be looking to close the gap between the wages agreed – for a three-year period – and the reality of the market, which in the current climate is much higher. Stephen Ratcliffe, chairman of the Construction Confederation, whose team will negotiate with union representatives is not giving away his position. A survey by IRS Employment review released in November showed that construction workers had received a rise of 5 per cent, ahead of any others in the private sector. We can expect wages to rise again, but by a little less than last year.