Architectural and engineering firms see drop in turnover in 2010

Architectural and engineering firms see drop in turnover in 2010

The cash brought in by UK based architects and engineers last year dropped by a further 2%, according to the latest official figures on manufacturing and services turnover.

This puts turnover down about 8% in cash terms since the peak of 2008.

Sadly this data series does not split the work on the basis of domestically generated and overseas generated work. But data from the pink book does suggest that exports account for about 10% of turnover.

Given that architectural and engineering services are very much people based industries, the cost base will be very heavily determined by wages. So the figures do need to be viewed in the light of general inflation and earnings.

If you adjust these figures for inflation, using the GDP deflators, we find that turnover dropped about 5% last year and is down about 12% over two years (see graph 1).

Looking at the trends, it is hard to judge how much of the current level of turnover is supported by the pumping up of public spending on construction resulting from the financial stimulus put in place by the previous Government.

So while there appears from the graph (see graph 2) a degree of stability, a further fall in the level of workload should not be discounted, given that the path of private sector spending on construction is very uncertain and it is not clear that any growth here will be sufficient to offset the drop in public funded work.

Comments are closed.