Fees were up 20% in 2008. But bosses warn of 25% cut in capacity in 2009.
Civil engineering consultants earned combined fee incomes of more than £10bn for the first time in history in 2008 according to the NCE Consultants File 2009, published this week.
Workload in the last three months of the year dropped dramatically, but companies listed in the file still broughtin fees of £10.33bn.
This was up 20% on 2007, which was also a boom year.
Staff numbers also ballooned to 171,886 - up from 156,423 - although this number may have fallen since as most consultants have been cutting jobs by between
5% and 10%.
Atkins chief executive Keith Clarke said he expected a big fall in industry capacity over the coming year. But he was optimistic about the long term prospects for consultants.
“I think the entire construction sector will lose 25% of its capacity,” he said. “But companies with a strong local presence and strong balance sheet, that haven’t borrowed huge amounts andhave good, strong technical skills
will survive better than those that are highly diversified and more generalist,” he said.
Global recession is no reason to doubt the need for good engineering design
Keith Clarke, chief executive, Atkins
“The thing about engineering is that we are selling our judgement and that is why we may have more
chance in the worst recession we will ever experience. Global recession is no reason to doubt the validity or need for good engineering design in the built environment.”
Scott Wilson chairman Geoff French, who is also current Association for Consultancy & Engineering chairman, agreed but said that government efforts to kick start investment were vital.
“The banking sector has to resolve itself or it will constrain everyone’s growth. The success of the government drive to get money through the system is crucial,” he said.
“As businesses grow they need cash. We all get paid in arrears and it is unlikely in the current circumstances we’ll get clients to pay in advance. But we either change the way we are paid or get access to capital. The problems start when a company comes to the end of its arrangements with a bank because in this climate the
bank is likely to be more diffi cult about the next line of credit.”
Civil engineering consultancies appear well placed to ride out the recession, however.
Exclusive research carried out for NCE by Imperial College London charting the 30 years over which theConsultants File has been published shows that throughout deep recessions of the early 1980s and 1990sconsulting engineering stood up well and was able to grow rapidly when recovery came.