黑洞社区

Chris Cole, WSP

There will be redundancies, of course. Companies like ours that did redundancy programmes in 2008 and 2009 were responding to adverse conditions in the private sector. Now people will be adjusting to the fall in public sector spending.

The private sector is in a better place than a year ago but it鈥檚 unlikely to recover fast enough to make up for the fall in the public sector. Not that we know the extent of the decline in public sector work yet. Neither will we know on the day of the Comprehensive Spending Review. It will come out later - the devil will be in the detail.

There will be pricing pressure too, and it will lead companies to establish lower cost bases and use offshoring (that is, exporting technical work to economies with low costs for skilled white collar labour, such as India). People say this means they will be taking the jobs of people based here, but if you don鈥檛 do this there will be no jobs for people here anyway.

It鈥檚 going to be tough in the UK for the next two or three years. Fortunately 70% of our business is overseas.

Peter Drummond, BDP

To talk about a double dip for construction is simplistic as we are all at different stages of the cycle. In the commercial world we鈥檙e seeing schemes that were sleeping stretch and wake up, such as city-centre regeneration projects. Surveyors are dependent on deals and contractors depend on things being built, so they鈥檙e not feeling the benefit of this gradual reawakening yet: it will be two to three years before anything hits site. But it is leading to revisiting planning consents and feasibility studies, which means activity for architects and planning consultants.

The commercial market is still fragile, though, and everybody鈥檚 waiting for the spending review to see if that hospital PFI will be cut.

As for margins, there will certainly be increasing pressure. That means the strong will survive and others will have a tough time. One of the saddest consequences will be firms鈥� inability to take on graduates.

Paul Dreschler, Wates

One of the top risks you have to consider for every contract in this environment is inflation. I鈥檓 not saying it will definitely happen but, as more time goes by, the more likely it becomes. The only way to tackle it is to make a judgment on how likely it is that costs will go up and work it out with the customer and the specialist contractors. It鈥檚 a collective problem, because if a specialist goes bust that will affect the client too.

Inflation risk will accelerate the squeeze on margins that we鈥檙e seeing through tender prices. Since margins are already low, we鈥檒l see more companies fail. It鈥檚 going to be hard.

But I鈥檓 optimistic about public spending cuts because there are areas where significant expenditure is vital to the future of the nation, like education.

In some cases refurbishment of schools will have a good business case. A balance will have to be found between modernising and economising.

It is also clear that the housing shortage is getting increasingly acute. So despite the cuts made to the Homes and Communities Agency鈥檚 funding, we鈥檒l need to build more homes. We鈥檒l need to find different business models, but they will be built.