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Survey ofUK Construction Professional ServicesMethodology2005/06This survey was led and project managed by:Construction Industry Council (CIC), CIC is a partner in ConstructionSkillsAnd jointly undertaken by:Davis Langdon Management Consulting and Experian BS SURVEY METHOLOGY 23/11/07 16:22 Page 1This research was funded by ConstructionSkills, the Sector Skills Council for Construction, and carried out by the Construction Industry Council (CIC) as lead partner.Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007 1 Introduction................................................................................. 1 1.1 Scope of the report ....................................................................... 1 1.2 Arrangements ............................................................................... 1 1.3 Scope of the study and definitions used in the survey................... 22 The consultation process........................................................... 5 2.1 Key features.................................................................................. 5 2.2 Overview....................................................................................... 5 2.3 Consultation with professional institutions and members of CIC ... 53 Development of the survey questionnaire ................................ 7 3.1 Key features.................................................................................. 7 3.2 Overview....................................................................................... 7 3.3 The pilot process........................................................................... 74 Survey sample and stratification ............................................... 9 4.1 Key features.................................................................................. 9 4.2 Overview....................................................................................... 9 4.3 Development of the sampling frame.............................................. 95 The administration of the survey............................................. 12 5.1 Key features................................................................................ 12 5.2 Overview..................................................................................... 12 5.3 Mailing ........................................................................................ 12 5.4 Data entry and processing of survey responses.......................... 136 Analysis of survey responses.................................................. 14 6.1 Software used for analysis of the suvey ...................................... 14 6.2 Quality and distribution of the overall response........................... 14 6.3 Grossing-up ................................................................................ 15 6.4 Summary of main steps included in the grossing excercise ........ 16 6.5 Results from the grossing up excercise....................................... 18 6.6 Making comparisons with 2001/02 estimates .............................. 19 Annexes ................................................................................................ 20 Annex 1: Survey Questionnaire.............................................................. 20 Annex 2: Population ............................................................................... 27 Professional Services Statistics Part 2 MethodologyCIC-ConstructionSkillsProfessional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007 1 Introduction................................................................................. 1 1.1 Scope of the report ....................................................................... 1 1.2 Arrangements ............................................................................... 1 1.3 Scope of the study and definitions used in the survey................... 22 The consultation process........................................................... 5 2.1 Key features.................................................................................. 5 2.2 Overview....................................................................................... 5 2.3 Consultation with professional institutions and members of CIC ... 53 Development of the survey questionnaire ................................ 7 3.1 Key features.................................................................................. 7 3.2 Overview....................................................................................... 7 3.3 The pilot process........................................................................... 74 Survey sample and stratification ............................................... 9 4.1 Key features.................................................................................. 9 4.2 Overview....................................................................................... 9 4.3 Development of the sampling frame.............................................. 95 The administration of the survey............................................. 12 5.1 Key features................................................................................ 12 5.2 Overview..................................................................................... 12 5.3 Mailing ........................................................................................ 12 5.4 Data entry and processing of survey responses.......................... 136 Analysis of survey responses.................................................. 14 6.1 Software used for analysis of the suvey ...................................... 14 6.2 Quality and distribution of the overall response........................... 14 6.3 Grossing-up ................................................................................ 15 6.4 Summary of main steps included in the grossing excercise ........ 16 6.5 Results from the grossing up excercise....................................... 18 6.6 Making comparisons with 2001/02 estimates .............................. 19 Annexes ................................................................................................ 20 Annex 1: Survey Questionnaire.............................................................. 20 Annex 2: Population ............................................................................... 27 2521Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007 This survey is a collaborative project involving the Construction Industry Council, their principal professional members and ConstructionSkills. The project follows earlier surveys of the UK professional services sector that were conducted in 1996 and 2002. The principal investigators for the research have been Davis Langdon Management Consulting (DLMC) and Experian, the same consultancy practices that carried out the previous research. The studys key objectives have been to: quantify the volume of outputs of the construction professional services sector in the UK provide various breakdowns of professional services output, which include: o the type of services traded by UK construction professional practices o the type of service providers and suppliers o the main elements of construction work for which professional services are traded o regional variations in the survey results identify the various service functions undertaken within each of the major professional disciplines provide data and information that is of interest to all of the major stakeholders in the project, including the CIC, its member organisations, ConstructionSkills and professional services firms themselves maximise the response rate to the survey to provide the most statistically robust results within a sampling frame of 13,000 firms. 1.1 Scope of the report Part 2 (this report) documents the methodology that has been adopted for the survey. It contains the key issues that have effected the overall analysis and is intended to place the more detailed findings in a methodological context. Part 1 of the report (the main findings) provides the analysis of responses and highlights the main issues that arise from them. There is a summary of key findings at the start of each section of the report, which is followed by more detailed commentary and analysis. 1.2 Arrangements 1.2.1 Background to the project Much of the approach to this survey has drawn heavily on our previous work Survey of UK Construction Professional Services in 1996 and 2002 (CIC, 1997; CIC 2003). These were the first surveys to quantify the added value of the Construction Professionals Services Sector to the wider economy. CIC-ConstructionSkillsProfessional Services Statistics Part 2 Methodology 1Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 20071.2.2 Primary beneficiaries Although all sectors of the construction industry are likely to benefit from a clearer understanding of current professional activity, the objectives of this study have been primarily focused upon meeting the information needs of the Construction Industry Council, their members and those of ConstructionSkills. It is hoped that this study will help to enhance the overall picture in terms of the value of construction-associated activity to the UK economy. 1.3 Scope of the study and definitions used in the survey 1.3.1 General definitions In order to ensure a level of comparability between this and previous surveys, the same definitions that were used in the earlier studies have been maintained: Construction: Construction is defined as those activities falling within Section F of the 2003 Standard Industrial Classification (SIC). This means building, civil engineering and specialist contracting activity including the installation of products and systems either in buildings or in association with building and civil engineering works Construction Professional Services: Defined generally, but not exclusively, as those firms operating in Section K, Division 74.2 of the SIC and includes architectural and engineering activities and related technical consultancy. This also includes surveying, town planning and project management. This definition is interpreted to include all professional services provided by the member institutions of CIC and relating to construction activities as defined above Construction Professional Service Firms: These are firms whose primary activity is the provision of construction professional services (accounting for more than 50% of their total output) They include self-employed individuals delivering construction professional services1.3.2 Volume of output The volume of total output of the construction professional services sector can be equated to the financial value of the services provided. Value in this case is the amount chargeable to customers for these services (in a given period) by all construction professional service firms. Output is measured net in terms of firms turnover, i.e. excluding the value of work done for firms by professional services sub-contractors. 1.3.3 Exclusions and inclusions Certain public and private sector organisations employ large numbers of construction professional staff whose primary activity is not the provision of construction professional services, for example, a national bank may have its own construction procurement department. In the case of these private sector organisations, unless the professional services establishment is a separate trading company or partnership, its output will not have been included within the sampling frame of this survey. Both central government and local authorities employ construction professional services staff. Some of these manage the client function while others offer construction professional services internally. All central government professional services have been excluded. Local CIC-ConstructionSkills2 Professional Services Statistics Part 2 MethodologyProfessional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007Authority technical departments have also been excluded from the sampling exercise, except in those cases (such as known county councils highways departments) where the construction professional services function has been established as a separate trading company or partnership. 1.3.4 Geographical coverage The geographical coverage of the study is the whole of the UK. The work of foreign-based subsidiaries of British construction professional service firms has not been included, unless income is remitted to the UK. 1.3.5 Breakdowns of fee income The type of services supplier is a key means of classification that has been used in this survey. Suppliers have broadly been classed in terms of their size and by broad professional service function. Size has been measured in terms of number of personnel or fee income (turnover). Workable size categories have been developed during the study. Service categories relate both to ways in which companies describe themselves and by the dominant services that CPS firms provide (which has been derived from the data). Breakdowns by type of construction work incorporate the standard categories that are used in the formulation of the DTIs Housing and Construction Statistics, specific types of construction project (such as offices), and the type of client (both public and private). The most basic breakdowns distinguish between housing, building and infrastructure and whether construction professional services are generated on new build, refurbishment, or repair maintenance and improvement (RMI). Breakdowns of fee income by region relate to the standard government planning regions. Construction professional services are frequently provided from a location remote from the construction project on which they are generated. The method used in this study to describe regional output relates to the location of the actual projects as opposed to the location of the firm. This is a key difference between this work and data collected during the compilation of the Annual Business Inquiry (ABI), where the firms location is used to provide regional breakdowns. 1.3.6 Service functions provided by types of firm It has been an objective of this study to measure the proportion of fee income that is generated on the provision of services that lie outside of the CPS firms core disciplines. The extent to which surveying firms, for example, now undertake work traditionally associated with engineers has been examined. This has been achieved by asking respondents to describe their fee income in terms of five main service headings and their associated sub-sets of professional activity. 1.3.7 Monitoring mechanism The research team recognise that whilst the results of the study aim to provide valuable data on output and the functions undertaken by CPS firms, the data represents the state of the construction professional services sector for a single period of time and will soon become CIC-ConstructionSkillsProfessional Services Statistics Part 2 Methodology 3Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007outdated. Only by building up a time series of key trends in this sector can government and the professions use the data to inform the development of policy. This study therefore continues to provide the basis for what could become a regular review and updating of the data. CIC-ConstructionSkills4 Professional Services Statistics Part 2 MethodologyProfessional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007Aims of the process To raise awareness of the survey To build a picture of the range of construction professional services To attract institutional support for the survey To ascertain the motivation of CPS firms to participate in the survey Key work steps A major workshop was held Strict guidelines were developed to ensure confidentiality The 2001/02 questionnaire was reviewed and examined 2.1 Key features 2.2 Overview The purpose of undertaking the consultation was primarily to: build up a picture of the range of construction professional services and their providers market test the utility and perceived value of the various types of information that the survey had the opportunity to provide provide an understanding of the availability of different types of information that firms could potentially provide and ascertain its ease of access for the different types and size of respondent raise awareness of the survey and generate support for the project 2.3 Consultation with the professional institutions and members of the CIC The specific objectives of this element of the consultation process were to: attract `buy in` from the membership of the CIC, thus engaging them in the promotion of the survey to their own members (professionals and firms) at an early stage of the project obtain feedback from the institutions on the broad content of the questionnaire attain institutional support in nominating member organisations for further participation in the consultation exercise A workshop was held on 22nd September 2006. The specific purpose of the workshop was to explore how the CIC and its members could work closely to add value to the survey. All of the major professional institutions were represented at the event.Attendees were presented with an overview of the findings of the previous survey and details of the latest project proposal. A facilitated discussion followed, which elicited the views of the CICs members on the overall purpose and content of the 2005/06 survey. The information gleaned from this event was extremely valuable in developing the general survey strategy. The technical element of the consultation focused on issues that related to the answerability of the questions that were likely to be posed in the 2006 survey. The consultation was CIC-ConstructionSkillsProfessional Services Statistics Part 2 Methodology 5Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007therefore used to probe whether there were any areas of the previous questionnaire that were likely to depress response rates if repeated in the 2006 survey. 2.3.1 Summary of actions taken as a result of feedback Following the outcome of the consultation process, the research team subsequently met to discuss the ways in which the profile and importance of the survey could be raised prior to the mailing. As a result of these discussions, the CIC played a key role in promoting the survey through conventional press channels and through their influence with their member institutions. CIC promoted the survey via their cascade and web site and provided institutions with articles, which were then customised to suit individual memberships. As a result various articles were published via institutional newsletters, journals and web sites. The CIC also worked as an integral member of the project team to ensure that the timing and marketing of promotional activity coincided with the mailing programme for the survey. In addition to the awareness raising activities that were undertaken to raise the profile of the survey, the project team also worked to produce a package of information that re-enforced the importance of the survey through good design and professional presentation. 2.3.2 Actions taken to ensure confidentiality and anonymity Ensuring the confidentiality of responses and the anonymity of respondents became a key element of the survey administration process. As a result, the research team instigated a strict set of guidelines that were adhered to throughout the survey. These included: only allowing Experian (a wholly neutral organisation, specialising in data analysis and economic forecasting) access to the returned questionnaires only allowing transfer of questionnaire data between team members (including the CIC and DLMC) in anonomised electronic format, containing no data on the names or addresses of the responding firm presenting the results of the analysis in such a way that readers of the final report could not identify the specific influence of individual firms. CIC-ConstructionSkills6 Professional Services Statistics Part 2 MethodologyProfessional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007 The final design was heavily influenced by previous surveys particularly the 2002 survey A professional graphic designer was employed to enhance the quality of the questionnaire A pilot exercise was conducted to test the format and clarity of the questions Amendments were made following the inputs from the pilot exercise Actual pilot responses were used to develop the analytical framework and data entry shell Minor amendments were made to the questionnaire, resulting from work on the data entry and analysis framework 3.1 Key features 3.2 Overview The results of the consultation process fed directly into the design of the questionnaire, which can be found in Annex 1 of this report. The overall design of the questionnaire was largely influenced by the questions that were asked in the 1996 and 2002 surveys, as many had to be repeated for purposes of consistency and to enable comparisons to be made between the three sets of survey results. The research team employed the services of a graphic designer to give the questionnaire a professional, attractive and authoritative style. This was in direct response to the outcome of the consultation process which highlighted the need for a highly professional presentation to maximise the response rate. 3.3 The pilot process The questionnaire was piloted to test the clarity of questions and the overall format/layout. The pilot sample was drawn from nominations that had been provided by the main institutions. It was additionally mailed to each member of the project steering group for comment. The pilot was distributed in October 2006. The main outcome of the pilot process was a final version of the questionnaire that was much clearer than the initial draft in terms of navigation, question wording and appropriate explanations. General revisions included the re-ordering of headings, numbering and minor textual amendments. Detailed amendments to the questionnaire that took place as a direct result of the pilot included: greater clarity on the capacity in which the respondent filled in the questionnaire enabling the respondent to answer questions as a local office, as opposed to the national (or whole) enterprise CIC-ConstructionSkillsProfessional Services Statistics Part 2 Methodology 7Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007 the introduction of employee size bands to assist respondents who could not give accurate figures in the detailed employment section of the questionnaire. This new section was designed to provide comparable data to the DTIs housing and construction statistics The responses to the pilot questionnaire were also used to assist in the development of the analytical framework and data entry shell for the survey. The development of the analysis methodology also led to iterative, minor changes to the design of the questionnaire in an attempt to maximise the integrity of the data entry and analysis process. Data entry and validation procedures were also formalised as a result of carrying out the pilot exercise. The actual data from the completed pilot questionnaires was used to test all elements of the data abstraction and analysis process. CIC-ConstructionSkills8 Professional Services Statistics Part 2 MethodologyProfessional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007Key finding No comprehensive data exists from government or institutional sources that fulfils the need to address the individual respondents personally, or to provide a detailed breakdown of the population. Sample details The sample size was 13,000 firms Experians National Business Database was chosen as the source of the sample data The sample was drawn from a population of approximately 28,000 CPS firms The sample was stratified based on type of firm, size of firm and location. 4.1 Key features 4.2 Overview The research team placed considerable emphasis on compiling accurate information with respect to the size and structure of the total population. It was a key aim of the survey to obtain a representative sample of respondents. The stratification of a robust sample, taken from accurate population data was considered to be a pre-requisite in achieving this goal. In carrying out our initial research, we found that no comprehensive data exist from the available institutional or government sources that provide a sound basis for constructing data on the overall population of CPS firms. This is a situation that is essentially unchanged since the last survey. The need to look outside of government and institutional records therefore became an important element of our work in developing the sample frame. 4.3 Development of the sampling frame 4.3.1 Review of institutional records A review of the data held by the institutional members of the CIC on the structure of their membership, indicated that it would be impractical to use the data sets held by the main institutions as the main population base. Our initial research revealed that only a few institutions are able to provide data on firms, or type of service supplier. However, most institutions were able to provide data on the regional distribution of their membership, which tended to be available at the county level. Some of the institutions (e.g. the ACA and ACE) are dedicated to representing the interests of firms. These associations do hold directories of member firms, containing data on size of organisation and services offered. However, they do not have comprehensive data on the whole range of CPS firms by discipline or size. CIC-ConstructionSkillsProfessional Services Statistics Part 2 Methodology 9Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007Data on firms, where it does exist from institutional sources, is generally available in the form of hard copy directories and lists. These usually give the name of firms that are registered with the relevant institutions. Previous surveys found that directories tend to be produced mainly for use by potential clients of member services and entries are essentially self-nominating. They also generally fail to quantify the size of the practice and the coverage of the lists tends to be uneven (as the firms that subscribe to such lists tend not to include their full details). 4.3.2 Review of government sources The research team carried out a review of the Inter Departmental Business Register (IDBR). Significant problems exist with the IDBR, which includes the lack of any personal contacts associated with firms (only 5% of records in the IDBR contain any personal contact details). The lack of any personal contact details in the IDBR gave the research team significant cause for concern as the inability to address the questionnaires to senior members of the practice by name is likely to have an adverse effect on response rates. Other problems remain with the use of the IDBR, which include the need to draw up separate contracts for the datas use, thus preventing the research team from using outsourced mailing houses (as no data provided by the IDBR can be disclosed to third parties). Another weakness of the IDBR is its reliance on high level SIC classifications (Standard Industrial Classification). These industry classifications introduce noise in to the population because of the inability to identify CPS firms, as distinct from companies offering services in related, but separate, sectors of the economy. For example the Surveyors SIC category is likely to contain records of hydrographical surveyors working for the oil industry, who cannot be easily abstracted from the data. The research team felt that the use of the IDBR would have introduced a high risk of questionnaire redundancy because of the inability to identify true construction organisations. It would also introduce an unacceptable level of uncertainly in to the grossing up exercise during the analysis stage. 4.3.3 Final choice of sample frame The limitations of the data provided by both the professional institutions and the IDBR required an alternative sample source to be identified. Our research was extended to cover commercially available datasets and enquiries were made of various commercial data providers including Glenigan and Experian. Experian were eventually found to be the most reliable source of information for this particular survey, especially in their coverage of smaller firms. The Experian database is an amalgam of the Thomson Directory, Yellow Pages and Companies House data covering approximately 4.2 million businesses in the UK. 4.3.4 The structure of the Experian dataset The information held on each business includes: company name full address, locality and region type of business CIC-ConstructionSkills10 Professional Services Statistics Part 2 MethodologyProfessional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007 SIC Code (relating to UK 92 Standard Industry Classification Codes of economic activities) number of employees contact name The actual survey sample was chosen from a population of approximately 28,000 construction professional services firms, operating in 24 construction-related categories. The majority of firms within the sample were drawn from the three traditional disciplines of architecture, engineering and surveying. 4.3.5 Sample size It has been a main aim of the project to achieve a similar response rate to previous surveys and to maintain a statistically valid result. For statistical validity to be achieved, a target of 1000 responses was agreed - requiring a response rate of approximately 8%. In developing the sample frame it was assumed that the results of the survey would generally be reported at the first or second levels of disaggregation. An example of this level of reporting can be found in Part 1 of this report, where data has been presented for the proportions of new build and repair and maintenance work that take place in each region of the UK. We originally estimated that a response of between 800 and 1400 firms would be required to carry out statistically valid research at this level depending on the number of degrees of freedom created by individual variables and analyses. This was seen to be a realistic target for achievement and was generally met with our achieved response of 801 firms.The research team realised at an early stage in the project that it would be extremely unlikely that statistically valid results would be achieved at the third or fourth levels of disaggregation. For example, reporting on the relative proportions of fee income generated on new work, by different building types and regions would not be possible with the achieved response of 801 firms. 4.3.6 Stratification The sample was stratified using three main categories within the Experian dataset: size of firm type of business (from 24 CPS related categories) region Selection for the sampling frame by type of firm and region was in relation to the proportion of firms in the global population, with the exception of Northern Ireland. For Northern Ireland, the size of the survey sample was boosted to the total population of firms to ensure that the minimum of 50 responses required to provide a robust analysis of the sector in Northern Ireland was received. For size of firm, the sample was biased in the direction of large firms to ensure the greatest coverage of the sector in terms of fee income and employment. The structure of the population and associated sampling fractions that were used to define the sample can be found in Annex 2 of this report. CIC-ConstructionSkillsProfessional Services Statistics Part 2 Methodology 11Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007Key elements of the process The survey was mailed out in November 2006 Each questionnaire was accompanied with a personalised letter and reply-paid envelope 55 telephone enquiries were received from survey recipients 2,200 CPS firms were targeted in a follow-up exercise that took place in February 801 valid responses were received in total Returns represented a representative sample of the overall population 5.1 Key features 5.2 Overview The survey was mailed and dispatched during November 2006, the requested return date for all responses was the end of November 2006. All questionnaires were printed in two colours and sent with an accompanying letter containing the logos of all of CICs member institutions. The questionnaire pack included a pre printed freepost return envelope. 5.3 Mailing A professional mailing house was used for the distribution of the questionnaires. Each questionnaire was individually coded to allow Experian (the only team member with access to the actual questionnaire returns) to track responses. 5.3.1 Resulting enquiries from survey recipients The majority of enquiries from recipients were by telephone and tended to concern three issues: the applicability of the questionnaire to the recipient firms business the degree of detail which the recipient could provide requests to extend the return date. In all, 55 telephone calls were received. 50 were from firms whose business was not related to construction consultancy services. 5.3.2 Follow up method and returns The initial response was particularly encouraging, 650 questionnaires had been received by the requested return date of the end of November 2006. Analysis by Experian showed that the returns represented a highly representative sample of the total population. In planning the follow up to the questionnaire mailing it was therefore not necessary to weight our follow up exercise to any particular CPS group, region, or size of firm. The primary aim of the follow up exercise was to achieve the target of 1,000 responses. It was estimated that a target of 2,200 contacts would enable us to achieve our overall target CIC-ConstructionSkills12 Professional Services Statistics Part 2 MethodologyProfessional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007response rate and remain within the overall budget for the administration of the survey exercise. 90 questionnaires had been returned from addresses at which the addressee was not in residence (within the 5% error rate usually associated with commercially available data). These firms, along with the respondents, were removed from the original sample of 13,000 prior to the stratified selection of 2,200 firms that would be targeted in the follow up exercise. The follow up survey was mailed at the end of January 2007 with a return date of the end of February 2007. 5.3.3 Response to the follow up excercise The response rate to the follow up exercise was slightly disappointing, at 4% (yielding an additional 113 returns). The team had relied on a response rate of at least 5% in order to achieve the target of 1000 questionnaires. We believe that respondent fatigue may be a factor in the decline in response rate evident between the second and third surveys. Since the last survey there has been increasing interest in the CPS sector generally, and we are aware of a growing number of survey requests made on Construction professional service firms. 5.4 Data entry and processing of survey responses The data entry process involved the abstraction of 201 variables from each of the 801 questionnaire responses. To minimise the risk of data entry errors, professional data entry software was used (SPSS Data Entry II) that contained the relevant data integrity checks, which were applied through the creation and use of a questionnaire shell. We do not believe that the integrity and level of assurance provided by this form of data entry could have been achieved with the use of a standard spreadsheet application. It had been a conscious decision to only ask questions in a form that respondents would find easy to answer. In the majority of sections within the questionnaire, responses were asked in terms of a percentage of total fee income when actual fee income was the desired outcome. A large part of the survey preparation was therefore devoted to producing a set of derived and recoded responses, resulting in a final version of the data set that contained 300 variables for each of the 801 cases. CIC-ConstructionSkillsProfessional Services Statistics Part 2 Methodology 13Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007 6.1 Software used for analysis of the suvey All analysis of the questionnaire responses was carried out using SPSS Version 15.0. 6.2 Quality and distribution of the overall response The organisations that responded to this survey represent a broad and representative cross section of the professional services sector. Measured by fee income, responding firms generated a total of over 2.6 billion in fee income and between them employed over 45,000 full time members of staff. The response to the survey largely reflected the structure of the overall Experian population by type of firm, size and region. Figure 2.1 shows the distribution of respondents by size of firm. Figure 2.1: Survey responses distribution of respondents by size of firm Note: Size bands relate to those used in DTIs Housing and Construction Statistics When viewed in terms of size of firm, the sample displays typically, negatively skewed characteristics. The shape and relative proportions of this distribution are very similar to that for construction contracting organisations. Companies that employ less than 4 employees within the sample represent approximately 45% of all firms by number. These companies employ 1.4% of all of the employees within the sample and generate 1.2% of the fee income. While firms that employ over 300 members of staff represent approximately 2% of all firms in the sample (by number), are responsible for 75% of employment and 76% of total fee income within the sample. 051015202530354045501-3 4-7 8-13 14-24 25-34 35-59 60-79 80-114 115-299 300-599 300-1199 >1200No. employees in UKPercentCIC-ConstructionSkills14 Professional Services Statistics Part 2 MethodologyProfessional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007The unadjusted fee income data is skewed towards the largest firms, with 60% of the fee income being generated by 1% of the firms. The sample has therefore been normalised with respect to fee income, to ensure that the largest firms have not unduly influenced the results. The adjusted, normalised sample, which forms the basis of the various fee income estimates presented in this report, accounts for some 1.5 billion of fee income. The influence of extreme cases and outliers has been discounted from all of the main sections of the analysis reported in Part 1 of this report. 6.2.1 Completeness of responses The quality of the overall response was high. Almost all firms completed questions relating to the type of business, fee income, sector and type of work, professional services provided, employment details and procurement routes. There were generally a large number of missing cases in each of these various categories, which had been expected, as responses to specific questions in each section generated redundancy in other questions. However, in a limited number of cases it was apparent that respondents were only able to provide information in aggregate and that questions that had been designed to elicit more detailed information were answered less well. The questions in which the quality and level of response varied the most related to the professional services provided (Section 2), specific types of project on which fee income had been earned (Sections 3B and 3C) and regional estimates of fee income (Section 4). The consultation had revealed that these questions would probably be the most difficult for respondents to answer but their responses to regional distribution of work were sufficiently robust to present them as accurate data in Part 1 of the report. Appropriate caveats have been given in Part 1 of the report where necessary. 6.2.2 Arithmetical accuracy All returns have been automatically checked for arithmetical accuracy using the data entry shell that was developed and tested in the survey pilot stage. This was particularly appropriate and suited to the large number of questions in which columns were expected to sum to 100%. In some cases adjustments were made to some responses, which did not add correctly and where the respondents intention was obvious. In cases where the response was corrupt Experian contacted the respondent concerned in an attempt to correct the error. This approach proved successful in the majority of cases but where it was not possible to contact the respondent, or where it was not possible to impute a value with a high level of confidence, responses were subsequently categorised as missing. 6.3 Grossing-up In order to provide the overall context for the results of the survey and provide the basis of estimates for gross fee income, it was first necessary to establish an estimate of the total number of CPS firms operating in the UK. The grossing exercise was based on a thoroughly refined and de-duplicated version of the Experian dataset. This data was used in conjunction with Hampels weighted mid point estimates of fee income by size of firm to determine the aggregated fee income generated by the sector. In order to achieve this, the data within the sample were recoded to match the CIC-ConstructionSkillsProfessional Services Statistics Part 2 Methodology 15Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007Experian size band classifications that had been used in the development of the original sample frame. Prior to commencing the overall grossing exercise, a thorough examination of the survey responses with respect to fee income within each of the Experian size bands was undertaken to ascertain the integrity and validity of any subsequent analysis. As in the 2001/02 survey returns, it was found that the means and associated 95% confidence limits for fee income within the larger company size bands (employing over 200 persons) were not as robust as those in the smaller bands. This was due to the relatively small number of responses that were contained in these sub-sectors of the sample. In arriving at the final estimates of gross fee income for the sector, firms employing over 200 people were therefore discounted from the survey analysis, following a method outlined during the 2001/02 survey, and substituted with more reliable data from an independent source - the Building Top 200 Consultants survey. This survey was published on the 6thOctober 2006 and contains fee income data by type and size of firm for the financial year 2005/06. Whilst the coverage of this survey is not all embracing (as it is essentially a self selecting sample), it roughly equates to a census of all top consultancy firms in the UK. The smallest firms in the Building Top 200 employ considerably less than 200 people, which enabled us to select only those firms that employed over this number for inclusion in the grossing exercise. 6.4 Summary of main steps included in the grossing excercise Estimating the gross fee income for the sector comprised the following main steps: An adjusted fee income variable was derived that took account of the amount of work subcontracted by each organisation within each size band of the sample. This was done to avoid the potential for double counting of fee income within the dataset (an estimate of 4% was obtained from the 2001/02 survey results) In a separate exercise, the Experian data set was thoroughly de-duplicated using address, name and postcodes within and between all of the size bands. The Experian data was subsequently recoded from its original 25 classifications (see Annex 4) into categories that reflected the main Type of firm that have been used in the survey All of the outlying, extreme values within each of the associated size bands were temporarily abstracted from the data. This was done by carrying out an analysis of all extreme values within each size band of the sample, using SPSS, and removing them from the dataset The data within each size band of the sample was sub-categorised by the type of firm (as used in Section 1 of the questionnaire) and weighted mid point estimates (M-Estimates) of fee income were calculated for each of these sub groups. CIC-ConstructionSkills16 Professional Services Statistics Part 2 MethodologyProfessional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007o The initial M-Estimators used were Hubers1, Tukeys bi-weight2, Hampells3and Andrews Wave4. These are all robust maximum-likelihood estimators of central tendency that differ in the weights they apply to the cases. In all of these methods, more extreme values within each of the size bands receive less weight than values closer to the centre. M-estimators provide better estimates of the location than do the mean or median, especially in distributions with long tails as are often observed in construction (and has been observed in the CPS sample see Figure 2.1) o Having normalised each of the size bands prior to carrying out this analysis there was a high degree of consistency between the results provided by each of the M-estimators used. All provided more conservative estimates of fee income for each size band than the actual mean for each group o Gross fee income estimates were calculated using the results from each of these M-estimates but for reasons of consistency the overall result using Hampels has been reported in Part 1 of this report. The results using the other methods were all extremely close but Hampels was chosen as it predicted a gross fee income which lay between the other three measures, while being generous in its estimates for smaller firms, which we felt would partially address any under representation of smaller firms within the sample. The gross fee income generated in each of the size bands (up to 200 employees) was calculated by multiplying the number of firms within each sub category (i.e. architects employing between 2 and 5 employees) by the associated, weighted mid point estimate. The aggregated sum of all sub-categories within a size band provided the estimated gross fee income generated by a particular size of firm. The gross fee income within each of the size bands was actually calculated using this method at three points: o the mid point of each sub category within each size band o the lower 95% confidence limit for each size band o the upper 95% confidence limit for each size band The sum of all size band estimates, up to 200 firms, was then calculated at the mid point, upper and lower 95% confidence intervals The sum of the outliers within each size band was then added back in to their respective groups providing the fee income estimates that are given in Table 6.1 below Finally, the sum of the fee income for all of the firms within the Building Top 200 Consultants survey, employing over 200 permanent members of staff, was added to the 1 Huber's M-Estimator: An M-estimator of location. Cases with standardised values less than c receive a weight of 1. Those with larger absolute values have weights that decrease as their distance from zero increases. 2 Tukey's Biweight Estimator: Tukey's biweight estimator assigns weights of zero for observations with standardized values greater than 4.685 and weights inversely proportional to the distance from the center for all other observations. 3 Hampel's redescending M-estimator: A three-part redescending M-estimator that is characterized by three constants (a,b,c). Standardized observed values with an absolute value greater than c are assigned a weight of zero. Values between 0 and a are assigned a weight of 1, while values between a and b and between b and c are assigned weights that depend on their distance from zero. 4 Andrews' Wave: A type of redescending M-estimator that does not have abrupt changes in the weights assigned to cases. Instead, a smooth sine curve is used to determine case weights. Standardized values in absolute value greater than c are assigned a weight of 0. CIC-ConstructionSkillsProfessional Services Statistics Part 2 Methodology 17Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007gross fee income estimates for the mid point, upper and lower 95% confidence limits of each size band. Table 6.1: Gross fee income of firms employing up to 200 persons, using the 4 M-estimator techniques Note: UK fee income estimates for all firms employing more than 200 members of staff, using the Building Top 200 = 4.40 billion after a 4% adjustment for subcontracting has been taken into account. 6.5 Results from the grossing up excercise We estimate that the gross UK free income for CPS firms is approximately 13.9 billion. Table 6.2 shows the distribution of firms by size (in terms of number of employees) and type of firm, using aggregated and recoded Experian classifications. A full summary of the structure and distribution of gross fee income, size and types of firm can be found in Part 1, Section 3. Table 6.2: Estimated number of CPS firms by main type (aggregated Experian classifications) and size of firm (number of employees) No. of employees 1 2-5 6-10 11-50 >50 TotalArchitects 4062 4857 1339 1071 126 1145535 43 12 9 1 100Civil & structural engineers 1189 2181 994 1423 321 610820 36 16 23 5 100Building services engineers 780 1688 672 751 110 400119 42 17 19 3 100Other surveyors 619 981 273 205 29 210729 47 13 10 1 100Quantity surveyors 550 845 298 242 16 195128 44 15 12 1 100Managers 255 545 197 147 34 117822 46 17 12 3 100Others (including planners) 366 464 166 124 27 114732 40 15 11 2 100Total 7821 11561 3939 3963 663 27947M-estimator 1 2-5 6-10 11-50 >50-Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 20076.6 Making comparisons with 2001/02 estimates In Part 1 of this report we have estimated that output of the construction professional sector has risen by approximately 4% in real terms since 2001/02, from 13.4 billion to 13.9 billion. In making these comparisons we have had to inflate the reported UK fee income from the previous survey by a suitable measure and make an adjustment based on the different characteristics of the population that has been used in the 2005/06 survey. We have also cross-referenced our findings with statistics provided by the Office for National Statistics on the trends of output growth in Section K of the Annual Business Inquiry (Specifically, Section 74.2, Architecture, engineering and associated technical consultancy). This has been done to ensure that our estimates are representative of trends that have been witnessed in the wider economy. 6.6.1 Key factors in arriving at revised estimates for the 2001/02 survey. Estimates of the change in absolute levels of fee income in the CPS sector are less reliable than measuring the relative changes between duplicate variables in the two surveys, such as percentages of fee income generated on specific types of work. This is because the comparable data from the two surveys can be combined and compared directly within the same analysis and statistical tests of significance can therefore be applied before stating the result. Difficulties in making comparisons in the absolute levels of fee income generated by the sector as a result of the grossing exercise arise because: of the lack of reliable and longitudinal data on the performance of the CPS sector in the intervening period the grossing exercise is only partially based on data arising directly from the survey analysis the rest comes from other sources that have changed, by necessity, since the last survey different populations have been used as a basis for the surveys there are difficulties in finding and applying an appropriate measure of fee income inflation for the intervening period. In addressing these fundamental issues we have used the All industries implied deflator for Gross Domestic Product at market prices to inflate the estimates of UK fee income of CPS firms from the 1995/96 and 2001/02 surveys to 2005 prices. There are no definitive statistics for the actual inflation of professional fees during this period, but we believe that the all industries implied deflator is the most reliable when compared to other available measures such as the Tender Price Index which is not wholly relevant to professional services. The resulting estimate of 1995/96 fee income using this inflator (at 2005 prices) was 8.6 billion. The revised estimate for 2001/02 fee income using this method was 13.4 billion (at 2005 prices). CIC-ConstructionSkillsProfessional Services Statistics Part 2 Methodology 1920 NotesSection 1: Company/Practice Profile A Type of BusinessPlease tick one box to describe your practice's main activity:Architecture Building services engineering Civil and Structural Engineering Management consultancy (not project related) Multi disciplinary Planning Project management Quantity surveying Surveying Other (please specify)........................................................................................B Where is the majority of your practice's project work based:(Please tick one box) Locally regionally nationally internationally C Does your practice undertake work overseas? Yes No D Structure of PracticeWhat is the operating structure of your practice? (Please tick one box)Partnership LLP Ltd Co PLC Sole practitioner E Total number of offices:How many offices based in the UK How many offices based overseas F Total number of employees in the UK:1-3 4-7 8-13 14-24 25-34 35-59 60-79 80-114 115-299 300-599 600-1,199 1,200 and over G Total number of employees based overseas: 1-3 4-7 8-13 14-24 25-34 35-59 60-79 80-114 115-299 300-599 600-1,199 1,200 and over Note: The following questions cover income, workload and employment foryour practice in financial year 2005/06. You may respond for your practice as a whole or for the local office in which you are based.H Please confirm the basis of your responses: (Tick one box)Practice as a whole Local office I Please provide details of your practice's fee income in 2005/06 (excl. VAT):UK projects Overseas projects (1) Note: (1) Only include income received in the UK from overseas projects2006 Construction ProfessionalServices Survey Questionnaire The Construction Industry Council (CIC), as a partner of the Sector Skills Council for Construction (Construction Skills), is undertaking thismajor survey to ascertain the current size and structure of Professional Services in Construction during financial year 2005/06. The surveyfollows on from those conducted in 1995/96 and 2001/02, and will begin to establish a time series of data to quantify the UK market forconstruction professional services. Your responses will be used to establish key headline data for professional services and disciplines. The CIC urges all recipients to takepart in this survey. A high level of response will ensure that the survey can provide an accurate account of the size and structure of thesector. Your co-operation is greatly appreciated and all responses will be held in the strictest confidence.Please complete the questionnaire by 30 November 2006 and return it in the enclosed reply paid envelope. If you cannot easily respond tocertain questions, please leave these blank since a partial return is better than none at all. Queries should be directed to James Hastings onTel: 020 7355 8263; Fax: 020 7355 8277 or by e-mail (james.hastings@uk.experian.com). 21Professional Services Statistics Part 2 MethodologyDavis Langdon Management Consulting May 2007Annex 1: Survey Questionnaire Section 2: Professional Services Provided What percentage of your UK fee income was earned from: Note: Please refer to the service categoriesin A to F below before completing thisquestionUK Go to Planning and related services See AArchitectural and design services See BEngineering services See CSurveying services See DManagement services, including financial and legal services See EFacilities management and other services See F TOTAL 100% A Planning services Of your fee income on these serviceswhat percentage was from: (UK)Environmental studies Urban/regional planning Planning applications, appeals, inquires Traffic and transport planning and studies Site appraisal: technical/geotechnical Project feasibility studies (incl. financial appraisal) TOTAL 100%B Architectural and design servicesOf your fee income on these serviceswhat percentage was from: (UK)Urban design Landscape architecture Architectural design Space planning Interior design Environmental/sustainability advice and assessmentsArchitectural technologyTOTAL 100% C Engineering services Of your fee Income on these services,what percentage was from: (UK)Geotechnical engineering Structural design Fire engineering Building services design (mechanical, electricaland lighting, public health) Civil engineering Highways engineering Water management engineering Waste management engineering Environmental/sustainability advice and assessmentsTOTAL 100% F Facilities management and other servicesOf your fee Income on these services, what percentage was from: (UK)Facilities management Property portfolio management Research, testing and development ConservationOther please specify TOTAL 100% D Surveying services Of your fee Income on these services,what percentage was from: (UK)Land surveying Building surveying Quantity surveying Environmental/sustainability advice and assessmentsTOTAL 100% E Management services, financial and legal services Of your fee Income on these services,what percentage was from: (UK) Strategic management consultancy Value engineering/value management Risk management Financial management Project management/programmingQuality control/assurance CDM (planning supervisor) Other health and safety advice Contract negotiation Contract administration On-site supervision of works Environmental/sustainability advice and assessmentsDispute resolution: claims/adjudication/arbitration/litigationTOTAL 100% 22 North EastYorkshire & HumberEast Midlands East of England South East (excl. Greater London) Greater London South West West Midlands North West WalesScotlandNorthern Ireland TOTAL 100% Offices RetailLeisure EducationHealthFactories/warehouses HousingOtherTOTAL 100% 100% 100%RoadsRailPorts, harbours, waterways AirportsEnergy Cable/communicationsWater & sewage OtherTOTAL 100% 100% 100% Section 3: Sector and Type of Work A Type of workWhat percentage of your UK fee income was earned on the following types of work?TOTAL New Refurb R&MRESIDENTIAL:Private 100% Public 100% BUILDING:Private 100% Public 100% INFRA- Private 100% STRUCTURE: Public 100% 100%Note: Private includes work undertaken on public buildings - socialhousing, health, education etc. - that has been procured through thePFI/PPP route.Refurbishment may be considered as adding value to an existingstructure or building, whereas R&M maintains the structure at its currentvalue.B Type of building What percentage of your UK fee income from building was on the following:New Refurb R&MC Type of infrastructureWhat percentage of your UK fee income from infrastructure wason the following:New Refurb R&MNote: Infrastructure includes buildings incorporated within infrastructureprojects (e.g. airport terminal building, water pumping stations andrailway buildings).Section 4: GeographyA Regional EstimatesPlease estimate, the percentage of your fee income earned on projects located within the following UK regions:Section 5: Employment DetailsA UK staff numbers: Permanent staffPlease provide permanent staff numbers based on your mostrecent records. Please exclude sub-contractors when givingyour response.MaleFemaleB Professional staff profilePlease provide a breakdown by number of your permanentlyemployed, fully qualified professional staff by the followingdisciplines:ArchitectsArchitectural TechnologistsBuilding services engineersCivil engineersOther engineersTechniciansBuilding SurveyorsQuantity SurveyorsScientistsBusiness managers Contract & project managersAdministratorsLegal/business professionalsTown planning professionalsOther construction professionals 23Section 6: Further Information The results of this study are due to be published in March 2007. If you would like to receive a summary of the results, pleaseprovide contact details in the boxes below. This survey is fully supported by the members of the Construction Industry Council (CIC)CIC is the representative organisation for the Chartered Institutions, Professional Bodies,Trade Associations and Research Organisations of the UK construction industry andrepresents 25,000 firms and 500,000 individualsName Job Title/Function Address PostcodeTelephoneEmail[w1]24 Professional Services Statistics Part 2 MethodologyDavis Langdon Consultancy May 2007Annex 2: Population 1 2 to 56 to 10 11 to25 26 to 50 51 to 100101 to 200201 to 500501 through to highest No size details Total Acoustic Engineers 21 45 18 19 2 2 1 108 Air Conditioning Consultants 358 927 367 302 104 33 12 7 1 2111 Architects 1,629 2,643 838 571 186 62 22 3 2 3 5959 Architectural Services 1292 1113 160 73 18 7 5 1 2669 Architectural Technologists 231 189 21 2 1 1 445 Building Consultants 336 443 124 94 41 9 4 2 1 2 1056 Building Estimators 53 62 16 9 3 1 144 Building Services 24 44 19 30 9 2 128 Civil Engineers 251 483 331 431 287 117 38 19 2 1 1960 Draughtsmen & Drawing Services 256 194 26 21 4 2 503 Engineers - Consulting 597 1,133 442 365 158 53 28 24 10 2 2812 Environmental Consultants 279 480 197 169 85 33 7 4 1 1255 Heating Consultants 17 16 6 6 1 46 Landscape Architects & Designers 303 277 77 47 16 5 2 727 Lighting Consultants 76 170 53 31 3 2 3 3 1 342 Project Management 254 536 197 102 45 21 8 1 4 1 1169 Quantity Surveyors 497 692 340 187 60 12 6 3 1797 Site Investigation Consultants 21 69 32 36 6 7 1 1 173 Structural Engineers 337 548 213 144 30 18 3 5 1 1299 Surveyors - Building 594 685 156 74 16 8 1 1 1 1536 Surveyors - Land 101 227 83 54 15 6 4 1 491 Town Planning Consultants 254 272 83 30 11 3 1 654 Transport Consultants 91 192 83 58 22 11 7 5 1 1 471 Total population 7872 11440 3882 2855 1123 414 149 79 22 19 27855 Survey population 2288 3834 2531 2632 1050 388 120 62 19 12924 Sample Fraction 0.29 0.34 0.65 0.92 0.93 0.94 0.81 0.78 0.86 CIC-ConstructionSkillsProfessional Services Statistics Part 2 Methodology 25NotesFor more information contact:Mark Way,Director of Skills,CIC,26 Store Street,LondonWC1E 7BTe: mway@cic.org.ukt: 020 7399 7400 SURVEY METHOLOGY 23/11/07 16:22 Page 2

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