Respondents to the Geotechnical Services File 2008 (GSF) survey said that an economic downturn could hit major projects and geotechnical work first. But while consultant Atkins geotechnics and tunnelling managing director David French said opportunities for work on transport infrastructure and environmental projects remain strong, he warned: “Beware an economic downturn, which is likely to hit brownfield development first.”
Meanwhile, consultant Clarke Bond Group executive director Leon Stanger said: “With any downturn in the construction industry, SI [site investigation] budgets are the first to be trimmed.” But if major UK projects remain stable, it will mean good news for the high proportion of geotechnical and geoenvironmental firms already involved with them. Over one-third (35%) of respondents said they are working on the Olympics, and, despite its early stages, nearly one-quarter (24%) said they are involved with work on Crossrail, with 19% working on both.
As well as the housing development downturn, 5% said increasing materials costs (including steel, concrete and fuel) is putting an unwelcome and additional pressure on their work. A&J Geotechnical Services managing director David Evans said “steel and concrete prices are at present far too high”, and he sees no end in sight to the rises.
Indicating the industry’s loss of confidence over the past 23 months, only 61% of respondents expect a heavier workload next year, compared with a more optimistic 85% last year. Respondents are also more cautious with more than double (32%) expecting workloads to remain the same, compared with only 15% last year.
Predictions about the future provide a further indication that the sector is much more pessimistic. Perhaps the starkest contrast is offered up by the top 10 firms by turnover, which suggests the boom in geotechnics over recent years is over. Last year those firms showed a turnover increase for their last financial year of £100M (equivalent to 20%) compared with their 2006 counterparts. Meanwhile, this year’s top earners (of those who supplied these figures) recorded stable figures – the combined total for UK geotechnical and geoenvironmental work pulling in £609.46M, almost on a par with the £606.8M pulled in by the top 10 of 2007.
Combined information show firms in the GSF employ a total 7273 geo staff – up slightly on last year’s 7146. Female geo staff account for at least 13% of the workforce. But this virtual levelling off in total staff numbers fairs poorly when compared with the leap of more than 1000 from 2006 to 2007.
And the skills shortage remains a challenge for the entire industry – a sentiment supported by the continued appearance of 16 ground engineering professions on the National Shortage Occupation List (as at June 2008).
Jacobs director of operations Chris Adam said there is a trend towards globalisation of geotechnical staff resources. However, he adds: “Government imposed changes in rules for skilled migrant workers threaten the ability to employ overseas staff.”
A concern that could be felt throughout the industry as respondents said overseas employees account for 17% of their geotechnical and geoenvironmental staff.
As with last year, many respondents expressed further frustration on the lack of coherent guidance on contaminated land, or as Peter Brett Associates director Richard Thomas put it, there is “still no way forward” from Contaminated Land Exposure Assessment.
For a more in depth version of this analysis and full company listings see the Geotechnical Services File 2008 accompanying this month’s GE.