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Consultants fear election ‘nightmare’

A hung parliament is becoming increasingly certain and would be a “nightmare” for the construction industry, according to some of the most senior managers from the professional services sector.

A new group, pulled together by Construction News and representing more than a dozen of the country’s biggest QS, project management and property advisory companies, argue that a lack of strong mandate for the next government would delay private sector recovery and extend the pre-election hiatus on public spending into the autumn.

As one industry leader put it: “No majority is a distinct possibility and it will be the biggest disaster. And the smaller the majority, the greater the indecision. The availability of debt will not change as fast as we want it.”

Another added: “The nightmare would be a hung parliament. If the Tories get [a strong majority] they’ll have a quick budget and we’ll maybe know by October what’s going on.”

This pessimism was in contrast to reported growing confidence in signs of private sector recovery. Most were at least a little more optimistic than they were six months ago - if only because they felt there was more certainty
about the extent of the fall.

About a quarter of attendees expected their company’s revenues to shrink this year - about the same as expected them to grow in 2010.

A third expected to increase their workforces this year after sweeping redundancies across the industry in 2009.

About four out of 10 expected the construction industry as a whole to be flat or grow this year. The big question was how long the election hiatus would last and how quickly and deeply a new government would make cuts.

This was bound up with expectations of a Conservative majority but most view was that deep cuts in capital spending would wait until 2011 in an attempt to protect any burgeoning recovery.

A number of commentators talked about “going back to surveying as a good crutch rather than project management”.

Commentators were concerned about the commodisation of professional services, as prices were continuing to be driven down.

“For our profession that’s quite an issue, and there’s the danger it’ll get worse and that we’ll never recover from the pricing change”.

One industry leader said: “Some of the contractors have done really well pumping themselves up the food chain. They have worked hard at making more direct relationships with some of the companies. There is a role for us,
but it is not the same.”

Paul Morrell’s career in Davis Langdon before he became chief construction adviser made the CCA role an interesting topic for debate.

There was widespread support for his standing and ability but equally widespread concern that he had been given “an impossible job” that “isn’t defined in terms of what he is really there to achieve”.