Eight construction bosses on their plans to beat the downturn

The construction industry is no stranger to boom and bust, and many senior members of the industry have been here before. James Stagg talks to survivors of previous recessions and asks for their tips for keeping your head above water.

Graham Shennan, managing director, Morgan Ashurst

In 1992 I was managing director of a Kier regional business. It was just after Kier's management buyout so it was a tough time. It taught us that the way to succeed was to make sure every job was handed over exactly right. I'm seeing the same this time.

In my case I've been through three recessions and from our perspective it's not been as hard yet.

We have a robust strategy, having identified some time ago a strong focus by the government on the education sector. We are roughly 70% public and 30% private and right now that's a good place to be.

What's key to us is our decentralised business model. We are considered a friendly local business and decent people to work with.

The trick right now is to be nimble. With a spine of controls and a number of profit centres we believe we can react to the marketplace pretty fast.

Being with a solid group of companies will be key.  Kier grew through the '90s by being solid and reliable; this is what people will look for again.

Rob McGregor, managing director, Apollo Group

During the last recession I was just 22 and a trainee surveyor for John Laing, so I was a little sheltered from it all. For me it was more personal, like seeing houses going down in value. At Laing our order book was fairly full and I didn't see any redundancies.

When I hear talk of Keynesian politics it's music to my ears as just about every pound that comes in to Apollo is from public spending. We're not seeing the money coming through yet though.

Also, there are some thinly capitalised housing associations, and cash is drying up quickly so we expect more consolidation. Until they can get the books re-balanced they'll pull back from capital expenditure.

It's at these times that you look round at other businesses and follow a successful model. The problem is that if you're not in quick you're probably too late, the only thing to do is position yourself to take advantage when the market comes back.

Right now firms need to focus on cash, winning work and maintaining high standards of delivery. Flexibility will be everything.

Paul Lomas, director, Bowmer & Kirkland

We were a very different business back in 1992. The main difference is that back then we were more regional, operating mainly in the midlands. Now we have a much broader geographical spread.

We scaled down in the '90s and shed staff in line with other businesses. But we had a reasonable exposure to grocery businesses and that was one sector that didn't take its foot off the gas. The same is true now so we're fortunate to be working for Sainsbury's, Tesco and Asda.

The big difference is that now we have lots of work in the public sector.

Education in particular is a big and ever growing part of our business.

At the moment we're hoping Gordon Brown keeps spending. There is lots of competition for this money, but we have the benefit of being established in the public sector having diversified six years ago.

Ian Findlater, group business development director, May Gurney

In the '80s and '90s we were a regional contractor. We're in a very different business now. We used to bid a lot of work and secure a proportion of it. Thankfully we aren't in that position any more and 90% is predictable, long-term spend.

Having said that it is far harder this time around. Businesses need to make decisions early and cut when they need to cut. In terms of May Gurney, we have already moved into focusing on maintenance spend and long-term contracts. It was a deliberate decision to make us resilient and sustainable.

We want to be where we can be with growing markets with a good cultural fit.

That's why we've moved to offering a client-aligned perspective, working in sectors influenced by public perception, European legislation and waste issues.

Robin Mackie, chief executive, Miller Construction

The recession of the 1990s didn't affect us that badly; we were hit harder back in 1981 when we were a smaller, more traditional builder. In the '90s we had a good reputation for external re-cladding of 1960s multi-storey blocks. It was a niche market that we got into at the right time.

This year will be the biggest year we've ever had. In 2007, our turnover was £382m and this year it will be £620m. We've been chasing the retail sector fairly hard and are involved in BSF and LIFT schemes.

Work prospects for next year are the same as they were a year ago when we were about to embark on a record year.  In this climate we need to concentrate on key customers and blue chip clients. The stand out one is Prudential, for whom we are building a number of office blocks.

Like everyone else we're looking at what else we can be involved in. My first trip to Qatar was in January and we have had operatives out there since March. As the private sector drops off work over there is taking up the slack.

Keith Shankland, operations director, Hanson

In 1992 I was general manager of a brickworks. Back then we did what we've done now ­ we were very wary of the situation.

The late '80s and early '90s were good for us and the recession was a little unexpected. As a brick business, to manage stocks we laid off sites for months. The old way to manage stock was simply laying people off.

This time round we pre-empted the recession and closed inefficient brick sites, block plants and precast factories in anticipation. Where we have needed to we've laid off people.

We have cut back and laid off but we've also invested heavily in more modern plants.

Brick prices are holding up quite well and we've even pushed through a price increase. But it will be tough next year and the best we can hope for is a flat market.

Mark Oliver, managing director, H+H Celcon

I was engagement manager at McKinsey during the last recession. Back then the house building industry didn't crash as much as it has this time. We had an overall economic recession affecting lots of industries.

This time it's the financial services and construction that are affected.

You still see retail and export businesses doing alright so it's possible that this won't be a recession that affects the full economy.
But it's already affected house building more than it did last time.

Mortgage availability will start to come back. At some stage there will be opportunities and people will start buying. We have come into it much more quickly and in theory we will be able to come out much more quickly.

Stephen Gee, managing partner, John Rowan & Partners

When the recession hit it 1992 it was reasonably early in our growth and we'd just got to the point of doing quite well and were employing about 15 staff.

We had to trim back as much as possible, to the point that we even had to let our cleaners go. Instead we devised a rota for the partners to clean the toilets and managed to get through with six people. From what I can remember it was a gentler run-in during the last recession.

This time it's happened much faster. Work's gone off a cliff, but we are fortunate as we have a variety of private and public sector work.

Most of our work in the '90s was in hotel and retail, and we still have that side ­ which is now struggling.

I've described to staff that we're battening down the hatches and, with them seeing redundancies elsewhere the challenge is to keep morale up.