Eight contractor bosses on their hopes and fears for 2009

It's been a tough year for construction - but 2009 could be even tougher. Paul Thompson asked eight contractor bosses to give their predictions for the new year.

Garvis Snook, chief executive, Rok

In 2008 Garvis Snook was forced to take the decision to axe 750 of his staff in a bid to refocus.

"The tail end of 2008 has been bloody. I was convinced that we were heading for recession but I did not expect it to come so fast, stopping the UK economy overnight. No amount of crystal ball gazing would have predicted the freeze of capital expenditure programmes," he says.

That said, Snook thinks there are still some bright spots to look forward to next year. The public sector cash will come through and property repair and maintenance markets will improve as clients elect to maintain property rather than move, he says - a trend he expects to continue for the next few years.

Nevertheless it is the company of his mother - born before the First World War - and the rest of his family that keeps Snook grounded over the Christmas period.

"My mother served in the Second World War, lived through the great depression and has survived many booms and busts. She will bring my feet firmly back on solid ground and remind me that phases pass and the world keeps turning."

• Turnover: £950m
• Offices: 60+
• Employees: 5,000
• Sectors: Affordable housing, education, health, retail, insurance, leisure, airports.
• Business New Year's resolution: Stay true to our vision and values.
• Personal New Year's resolution: Relax and don't sweat the small stuff.

Paul Dreschler, chief executive and chairman, Wates Group

Paul Dreschler is another with a glass that is half full despite the difficult times the industry has faced over the last 12 months.

"The world economy has created unprecedented challenges for our customers. This in turn has created challenges for our business with the fit-out and housing markets most affected," he says. "We expect 2009 to present a number of challenges and it will no doubt be tougher than 2008. Public sector spending remains the bedrock of the industry's stability and areas likely to thrive will be education, social housing and infrastructure."

The Queen can be sure of his undivided attention when she delivers her annual Christmas speech, but nothing will distract him from his business goal for the New Year.

• Turnover: £949m
• Head Office: Leatherhead
• Employees: 2,200
• Sectors: Education, prisons, commercial, social housing, retail, interiors, commercial.
• Business New Year's resolution: Keep our customers satisfied and ensure we deliver safely and on time and to budget. Every time.
• Personal New Year's resolution: Seize every opportunity to celebrate success in my personal and professional life.

Graham Shennan, managing director, Morgan Ashurst

Some five years ago Graham Shennan's business made the strategic decision to shift the balance of work from mainly private sector to public sector, a move he claims has paid off so far.

"We are probably more protected from the economic downturn than many other contractors," he says. "Going into 2009 we have a strong order book and this is mainly being driven by framework and relationship-based projects."

Shennan says the downturn will spur the industry on, forcing it to raise its game with more innovation, creativity and service delivery proving a boon to clients. Less work on offer will mean stiff competition and a heightened squeeze on margins. "It is a challenge, but ultimately one that the industry can rise to," he claims.

Shennan will be facing a challenge of his own during the Christmas break - that of beating his children on the ski slope - but it is the challenge laid down by top performing companies in other sectors such as retail that will be his focus for the New Year. "We need to provide the same levels of customer service that the top performers in other industry sectors achieve. To win and retain business you'll have to be the best at what you do. That's what we are aiming to be," he says.

• Turnover: £621m
• Head Office: Stratford-upon-Avon
• Employees: 2,000+
• Sectors: Education, healthcare, defence, airports, commercial, leisure, industrial, retail.
• New year's resolution: To provide the same levels of customer service that top performing companies in other industries consistently achieve.

Stef Stefanou, chairman, Doyle Group

Stef Stefanou was astonished last year when contracts were suddenly cancelled and work disappeared overnight.

"The shocking thing was the terrific speed with which we fell from normal business to the bottom," he says.

"The other big surprise is how the housing sector failed to recognise that nothing goes on forever. Firms should've realised the peak had been reached and cut their cloth accordingly. It may sound easy to ask with hindsight but why didn't house builders have contingency reserves after all those good years? A strong industry almost disappeared in a flash."

Looking forward Stefanou predicts it will be tough for everybody in construction. "Even the vulture companies are struggling to operate because they can't get finance," he adds.

Doyle will become leaner to face the recession, which Stefanou believes will run well into 2010. He would like three New Year wishes. "The first is that banks realise the damage they are doing and start financing projects and businesses.

"To kick-start the economy, I would like to see the Government offer tax relief on two thirds of mortgage interest payments. That would save a lot of families' homes. The 2.5% cut to VAT meant nothing.

"My last wish would be to see my horse Helvetio win the Grand National - but that is maybe asking for too much."

• Turnover: £168m
• Head office: Welwyn Garden City
• Employees: 493
• Sectors: Residential, education, commercial, healthcare, retail.
• Business New year's resolution: Re-shape Doyle to trade successfully through a two-year downturn.

Chris Saxton, chief executive, Morris & Spottiswood

The ethos of making sure levels of customer service are high for existing clients is one which is echoed by Chris Saxton.

Key to holding on to work over the next year, Saxton claims, will be the strength of working relationships with existing customers and high service levels to these clients. He also points to the public sector as a vital source of income.

"We've been helped by a committed workforce and a strong portfolio of blue chip and public sector customers with whom we have long term relationships. These strong relationships with customers and suppliers are vital as is being selective about who you work with - from customers to the supply chain."

And Saxton is another advocate of the theory that the fit-out and maintenance sectors will benefit from the tightening market and points to burgeoning work in carrying out energy performance improvement work on buildings, essential for landlords looking to market their properties. It is his "every cloud has a silver lining" attitude - part of his list of New Year's resolutions - that will push businesses forward over the next year.

• Turnover: £125m
• Head Office: Glasgow
• Employees: 580
• Sectors: Retail, commercial, leisure, education, healthcare, affordable housing maintenance and new build.
• Business New year's resolution: Being positive about the future - every cloud has a silver lining.
• Personal New year's resolution: Staying fit.

Rick Willmott, group chief executive, Willmott Dixon Group

"The next few years will clearly be more challenging for the construction and housing sectors," Willmott says, "but my strong aim is to ensure that our business can thrive rather than just survive during the recession."

He says that businesses should be planning for its impact now - and adapting where necessary. "On the positive side, we have a good platform of secured workload for the next 18 months (£1.2bn) from some of the more predictable areas of Government spending such as education, social housing, health and prisons," Willmott adds.

"There's less certainty about 2010 onwards when longer term projects and frameworks begin to draw to a close, and public sector spending is predicted to slow in the run up to a general election."

However, he expects that by staying competitive in the marketplace, by adopting a prudent approach, keeping costs under tight control and looking to improve efficiency the group will be well placed to bridge this uncer-tain period.

• Turnover: £413m
• Head Office: Letchworth Garden City
• Employees: 700+
• Sectors: education, health, commercial, hotels, leisure, retail, law and order.
• Business new year's resolution: To protect our customer base through absolute performance.
• Personal new year's resolution: Give more, take less.

Jem Smale and David Venables, directors, Wildfire Building

In the depth of a recession it is easy to forget that necessity can be the mother of invention. Often tough times can force directors to take difficult decisions which can lead to long term prosperity and a change in emphasis for the business.

It is a view that David Venables and Jem Smale certainly adhere to. They have taken the decision to launch a high specification house building business in the pit of a recession.

The two had been riding the crest of the property boom running a successful development business with a portfolio of properties throughout the country, until the wheels came off the wagon with the tightening of the mortgage market.

"All our revenue came from turning projects around quickly and as soon as one of the key parts of that economic cycle collapsed we found ourselves over-exposed," says Smale.

Requests to carry out construction work had come in the past but the development of a contracting arm to the business had never made financial sense before.

"But needs must," says Venables. "We recognised the development side was on the wane and so decided to take our expertise into the private house building sector."

Already the business is halfway through a 12-month scheme to build one high-specification five-bedroom house and two four-bedroom semi-detached houses on a site outside Bristol, a development that should see the buildings sold, even in this tough market, for more than £3m.

Looking into 2009, the two have ruled out a quick return to the boom years but are adamant that businesses need to look forward rather than back.

"Agility in this sort of market is important," says Smale. "We were of a size where our structure was not cast in stone and we could move quickly.

"What companies need to do now is position themselves so that when the market does recover they will be well positioned to take advantage. It will be the first out of the blocks on the other side of the recession that is the most successful."

• Turnover: £1m+
• Head Office: Portishead
• Employees: 10
• New year's resolution (Venables): Keep up our levels of service and finish building my family home.
• New year's resolution (Smale): To build on what we have, and to go surfing more.

Graham Wren, executive director, Balfour Beatty Ground Engineering (BBGE)

Looking back on 2008, Graham Wren says BBGE has experienced a strong year in terms of volume of work and profit.

"Highlights include our acquisition of Branlow and the launch of Balfour Beatty GeoEnvironmental which extends our services to contaminated land risk assessment and remediation," he says.

The firm has delivered a number of innovations this year including its Green Siesta, a tool that enables customers to select the most carbon-efficient piling solution, and a new hollow piling technique developed with City University.

"Looking ahead to 2009, it will be interesting to see if the industry responds to the need for sustainable developments and innovation or whether companies will revert to focusing purely on the bottom line," he adds.

"Those companies that continue to invest in talent and sustainable initiatives will be best placed to succeed when the downturn begins to reverse."

• Turnover: Forecast to reach £119m in 2008
• Offices: 12
• Employees: 700
• Sectors: leisure, industrial, infrastructure, retail, public, residential, commercial.