Regional Focus: West Midlands: All busy on the western front

Being known as Britain's second city (after London) has done nothing for Birmingham's self esteem, according to the locals. The city is dogged by a lack of confidence and an inability to sell itself. Its media image is too often linked to deadbeat characters and general misery. Even in children's television, the sad character usually has a West Midlands accent.

Some people take it further, detecting significant differences between East and West Midlands. For Richard Madeley, the sales and marketing director for GAJ, each side is completely different.

"We are more corporate-minded in the West Midlands, more contractual, and try to make life difficult, while in the East they sit round the table and talk about it," he says. Mind you, although he works in the West, Madeley lives in the East.

Even Contract Journal failed to recognise West Midlands' unique identity. Of the host of contacts we drew up to interview for this feature, most of them turned out to be in the East Midlands.

The downside

Amusing though it sounds, there is a downside to this lack of separate identity. A spokesman for one contractor in the area said he feared his firm too often loses out to the sharp suit and shiny cufflink brigade, whose confidence is not necessarily backed up by capability. Yet according to all the locals we talked to, the West Midlands has a great deal to shout about at the moment.

Birmingham city centre is undergoing a huge makeover. The old Bullring eyesore has been replaced at a cost of £545m with an eye-catching, already very recognisable shopping complex. New Street Station is up for a huge redevelopment. The city is planning a new, £193m library, and no wonder - the current one is the busiest in the country.

Over at Snow Hill, there is a huge mixed-use and office development under way. Birmingham Great Park is having £400m spent on a retail, leisure and business park. The BBC Pebble Mill studios are being redeveloped as a state-of-the-art Science Park by Advantage West Midlands, while the BBC has relocated to the more central Mailbox.

What's more, with the closure of the Longbridge Rover plant, the locals will soon see a £100m high tech research and development facility built on the site. The University of Birmingham is planning £250m of investment to modernise its facilities. Battery Park will see a £100m, 18ha mixed-use retail site.

Housing hasn't been left out: more than £240m is being used for an estate regeneration programme, including at Ley Hill. With all of this comes new roads and a park and ride at Longbridge station.

The Learning and Skills Council is also in on the act with an OJEC for consultants to be appointed for a number of frameworks for colleges in the area, including Matthew Bolton and Sutton Coldfield, which could total more than £1bn of work. A Building Schools for the Future scheme is planned for the city, as well as for Sandwell and Coventry. The whole area has become a virtual forest of tower cranes.

Mark Williams, director of the Birmingham office of Capita Symonds, is revelling in the work. "I am a Birmingham person and work and live here, so it is really exciting," he says. "But I think we are hard on ourselves. We should be more proud of what we have achieved."

And it's not all just Birmingham. Over at Edgbaston the professionals have made a mass rush for the city centre, leaving behind their old haunt to be redeveloped with new shopping and retail, plus a new Calthorpe House, the landmark offices.

Willmott Dixon Midlands managing director Peter Owen also flags up the Brindley Place development with particular pride, as well as the redevelopment of the Jewellery Quarter.

"There are hundreds of flats being built around the bus station, Connaught Square and Digbeth High Street: including one for 660 flats, a hotel and a fitness centre," he explains.

Public and private camps

So who is going to do all this work? Owen believes the construction industry in the West Midlands is falling into two camps: public and private. The Academy Frameworks are indicative with the likes of Skanska, Carillion, Kier and Laing O'Rourke well represented in the education spend.

On the private side there are contractors such as HBG, Shepherd and Bowmer and Kirkland, with the latter persistent in the retail market.

With steep learning curves in the public sector procurement, firms that have been there a long time are proving particularly successful in further contracts, squeezing out would-be rivals. In their turn the rivals are going for the private sector work but with mixed success, hence the feverish takeover activity as the less successful fall to greedy predators.

Owen is concerned that too much concentration in one or the other camp is not a wise business strategy. "If things change you leave yourself exposed. Our strategy is 60% to 70% public sector and 30% to 40% private to avoid the risk."

He is keeping a close watch on the redevelopment of Coventry, which includes a new football ground plus new retail and offices around it, triggering further investment in sheds and storage facilities plus new infrastructure.

Owen also flags up the Building Schools for the Future programme as another catalyst for redevelopment. Birmingham will be spending £800m on schools and another £200m in Sandwell and in Coventry. "Once you regenerate the schools people want to invest, so public spending regenerates the area."

At the smaller end of construction turnover, GAJ is enjoying a boom. It is already more than halfway to achieving its target £25m turnover, and it has only been counting since July. "We are not giving it away, we are hitting the margins and targets we want to hit," confirms Madeley. He puts it down to getting the supply chain right - the company won an award earlier in the year - and good teamwork from the top down.

Typically, GAJ has cultivated its client base, so enjoys plenty of repeat and negotiated work to compensate it for the fiercely competitive £2m to £4m jobs arena, which is saturated with contractors from both the East and West Midlands. To protect itself, GAJ has held on to its small works and planned and reactive maintenance divisions, when others have shed theirs, to increase its versatility to clients.

But the picture is patchier for smaller firms. Graham Urwin, managing director of Grayline Construction, admits the Northern Rock debacle has deterred some homeowners from spending on their property. "We had a couple of jobs cancelled after it happened," he says. "I don't blame them, but unless you have a reasonable orderbook you can't bring other things forward because you have a lead-in time." He is another one who manages the delicate balancing act of securing both domestic and commercial work.

Enjoying the boom

Arthur McArdle, managing director of Woodfield Building Services in Staffordshire, claims to be less proactive. "In the last 20 years it has gone from domestic into schools and churches and back to domestic, with no forward planning from us." That said, his orderbook is full with business running right into next year. And he says he is not the only one - local builders merchants say they are also enjoying a boom.

The perennial worry for all these businesses is staff. In McArdle's case it is the decision to cease construction training at Stafford College from last September. He doesn't have many apprentices to train, but the ones he does benefited from a very good local facility which has now gone.

Back up the scale Peter Owen is also anxious about recruiting and retaining quality staff. With the switch to preconstruction estimating, design and build and planning, all staff are locked into contracts much earlier, leaving far less flexibility than in the past. To add to the stress, Owen is finding that recruitment agencies are more cut-throat than ever. "Our staff get headhunted nearly every week. Some get two or three calls a day from other contractors via the agencies. The more successful companies manage to hold this off but the weaker ones lose staff and get even weaker. Everyone is trying to talk wages up."

Willmott Dixon is overcoming the challenge by opening up two new offices in January, which will increase the number of senior roles for rising stars while enabling the individual business units to stay personal and manageable. The company also prides itself on helping its staff ensure they achieve a good work/life balance. When you work it out, a higher salary often masks a low hourly rate when you are on call 24/7. What's more, with pay rates fairly high in construction, those pursuing big bucks are probably already out in the Middle East and the rest seem to prefer to stay local. "The pool of resources willing to travel is getting lower and lower," adds Owen.

Younger people in construction in the West Midlands seem more willing to fight the old stereotypes than the rest.

Amy Coonagh, marketing executive at Shaylor Group, operates out of Aldridge, 10 miles north of Birmingham. "In the last few years there has been so much redevelopment, this is an exciting place to be," she says. "Friends who visit say it is very cosmopolitan. There is a mentality that Birmingham is always overlooked, but people have to step up to the plate and say we have a lot to offer."