Speaking with engineers, the consensus seems to be that the downturn is coming, but to what extent no one knows.

“The market is becoming more competitive and based on lowest price rather than quality service,” says Jacobs Ireland’s managing director Jim Hayde (pictured). “Also, workload will drop as businesses locate to more competitive countries.”

It is clear however that in Ireland the civil sector remains strong. Bar some late tenders, especially in water services, the Department of Finance’s budgetary commitments to the industry seems to convince. Yet opinions are split as to the future of non-residential sectors which more readily require the services of consulting engineers, namely industrial, commercial and retail.

The latest UBS report predicts a slowdown in the order of 30% in commercial property in Ireland over the next two years, while in the UK the London Shard of Glass skyscraper project had to be put on hold because of the collapse of a number of investment funds.

Some analysts say there is no hard data to say that Ireland will go down the same route, but in the end what really matters is how Irish engineering practices will be able to react if an unfavourable scenario were to turn into reality.

“Most of the problems coming across our desk at the moment are in the
construction sector,” says Shane Somers of Keogh Somers, reflecting the current sentiment in the corporate recovery sector.

Declan Taite of Farrell Grant Sparks explains that there’s been a 12% increase in insolvencies year-on-year in the industry for the past couple of years, while Grant Thornton partner Paul McCann predicts a 20% to 30% increase for 2008.

“My sense is that this will have a snowball effect in terms of engineering practices,” says Taite although he acknowledges only a handful of consultancies went under in 2007. Because of their fairly straightforward income and cost structures, consultancies are hard pressed to go bust.

This is an extract from an article featured in the March edition of Construction Engineer - Click HERE to Subscribe Today!