Industry suffers but worse still to come

Foster & Partners said it plans to make about one in four of its staff redundant as the world’s most successful architecture brand succumbed to the market slump.

The practice will make about a quarter of its 1,300 employees redundant and close its offices in Berlin and Istanbul at the end of March.

With a presence in more than 20 countries and a turnover of £142m, the practice was considered by many in a good position to ride out the recession. But after several projects were either cancelled or put on hold, it was forced to take action this week.

With over 300,000 job losses predicted in the construction sector in 2009, construction’s largest ever coalition met at Westminster last week to demand that the government intervenes to support the industry.

The launch of the “Get Britain Building” campaign was attended by almost 100 industry leaders including the Federation of Master Builders and the British Precast Concrete Federation. The campaign puts forward 10 measures designed to get the sector back on track. These include getting banks to lend to small businesses, launching a strategy for making existing homes more energy efficient and cutting VAT for all repair and maintenance work from 17.5% to 5%.

The recession will reach its toughest point for the sector so far in June 2009 and may spell the end of collaborative working, according to a report called “The Equal Partners” and covered in Building magazine.

Collated by a firm of management consultants and based on the views of 30 private sector clients including British Land, BAA, Land Securities, Hammerson and Stanhope, the reports predicts that relationships between clients and supply chains will either become more collaborative or more price-focussed and combative. It says June is likely to become the ‘crunch month’, when many projects near completion and there are no new ones to start, which will dictate the direction most relationships go.

The report comes as research from QS Rider Levett Bucknall indicated that tender prices could drop by up to 10% next year. It said the weak pound will mean UK firms struggle to benefit from the global fall in materials prices, and that tender prices in London will fall by 2.5%-5% in 2009 and up to 2% in 2010.