survey of uk construction professional services...

Survey ofUK Construction Professional Services

Methodology

2005/06

This survey was led and project managed by:

Construction Industry Council (CIC), CIC is a partner in ConstructionSkills

And jointly undertaken by:

Davis Langdon Management Consulting and Experian BS

SURVEY METHOLOGY 23/11/07 16:22

This 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 Methodology

Davis 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................... 2

2 The consultation process........................................................... 5 2.1 Key features.................................................................................. 5 2.2 Overview....................................................................................... 5 2.3 Consultation with professional institutions and members of CIC ... 5

3 Development of the survey questionnaire ................................ 7 3.1 Key features.................................................................................. 7 3.2 Overview....................................................................................... 7 3.3 The pilot process........................................................................... 7

4 Survey sample and stratification ............................................... 9 4.1 Key features.................................................................................. 9 4.2 Overview....................................................................................... 9 4.3 Development of the sampling frame.............................................. 9

5 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.......................... 13

6 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


CIC-ConstructionSkills



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................... 2

2 The consultation process........................................................... 5 2.1 Key features.................................................................................. 5 2.2 Overview....................................................................................... 5 2.3 Consultation with professional institutions and members of CIC ... 5

3 Development of the survey questionnaire ................................ 7 3.1 Key features.................................................................................. 7 3.2 Overview....................................................................................... 7 3.3 The pilot process........................................................................... 7

4 Survey sample and stratification ............................................... 9 4.1 Key features.................................................................................. 9 4.2 Overview....................................................................................... 9 4.3 Development of the sampling frame.............................................. 9

5 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.......................... 13

6 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 25

21



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 study’s 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.


Professional Services Statistics – Part 2 Methodology 1



1.2.2 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

services

1.3.2 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


2 Professional Services Statistics – Part 2 Methodology



Authority 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 DTI’s 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 firm’s 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





outdated. 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.





Aims 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 CIC’s 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





therefore 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.





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





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 DTI’s 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.





Key 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

Experian’s 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.





Data 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 data’s 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





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.





Key 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 CIC’s 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 firm’s 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





response 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.





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 DTI’s 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.

0

5

10

15

20

25

30

35

40

45

50

1-3 4-7 8-13 14-24 25-34 35-59 60-79 80-114 115-299 300-599 300-1199 >1200

No. employees in UK

Perc

en

t





The 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 respondent’s 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





Experian 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 6th

October 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.





o The initial M-Estimators used were ‘Huber’s’1, ‘Tukey’s bi-weight’

2, ‘Hampells’

3

and ‘Andrew’s Wave’4. 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 Hampel’s 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.





gross 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 Total

Architects 4062 4857 1339 1071 126 11455

35 43 12 9 1 100

Civil & structural engineers 1189 2181 994 1423 321 6108

20 36 16 23 5 100

Building services engineers 780 1688 672 751 110 4001

19 42 17 19 3 100

Other surveyors 619 981 273 205 29 2107

29 47 13 10 1 100

Quantity surveyors 550 845 298 242 16 1951

28 44 15 12 1 100

Managers 255 545 197 147 34 1178

22 46 17 12 3 100

Others (including planners) 366 464 166 124 27 1147

32 40 15 11 2 100

Total 7821 11561 3939 3963 663 27947

M-estimator 1 2-5 6-10 11-50 >50-<200 Sum

Hubers M Estimator 375.78 1359.54 1398.55 4427.32 2259.01 9820.19

Tukey's bi-weight 358.19 1215.80 1357.53 4279.00 1762.33 8972.85

Hampells M-est 370.99 1350.15 1400.66 4461.12 1961.72 9544.63

Andrew's wave 357.90 1212.51 1355.13 3984.59 1760.06 8670.19





6.6 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).



20 Notes

Section 1: Company/Practice Profile

A Type of Business

Please 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 Practice

What 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 projects

2006 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 ([email protected]).

21



Annex 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 thisquestion

UK Go to

Planning and related services See A

Architectural and design services See B

Engineering services See C

Surveying services See D

Management services, including financial and legal services See E

Facilities 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 services

Of your fee income on these serviceswhat percentage was from: (UK)

Urban design

Landscape architecture

Architectural design

Space planning

Interior design Environmental/sustainability advice and assessments

Architectural technology

TOTAL 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 assessments

TOTAL 100%

F Facilities management and other services

Of your fee Income on these services, what percentage was from: (UK)

Facilities management

Property portfolio management

Research, testing and development

Conservation

Other please specify

TOTAL 100%

D Surveying services


Land surveying

Building surveying

Quantity surveying

Environmental/sustainability advice and assessments

TOTAL 100%

E Management services, financial and legal services


Strategic management consultancy

Value engineering/value management

Risk management

Financial management

Project management/programming

Quality 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/litigation

TOTAL 100%

22

North East

Yorkshire & Humber

East Midlands

East of England

South East (excl. Greater London)

Greater London

South West

West Midlands

North West

Wales

Scotland

Northern Ireland

TOTAL 100%

Offices

Retail

Leisure

Education

Health

Factories/warehouses

Housing

Other

TOTAL 100% 100% 100%

Roads

Rail

Ports, harbours, waterways

Airports

Energy

Cable/communications

Water & sewage

Other

TOTAL 100% 100% 100%

Section 3: Sector and Type of Work

A Type of work

What percentage of your UK fee income was earned on the following types of work?

TOTAL New Refurb R&M

RESIDENTIAL: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&M

C Type of infrastructure

What percentage of your UK fee income from infrastructure wason the following:

New Refurb R&M

Note: Infrastructure includes buildings incorporated within infrastructureprojects (e.g. airport terminal building, water pumping stations andrailway buildings).

Section 4: Geography

A Regional Estimates

Please estimate, the percentage of your fee income earned on projects located within the following UK regions:

Section 5: Employment DetailsA UK staff numbers: Permanent staff

Please provide permanent staff numbers based on your mostrecent records. Please exclude sub-contractors when givingyour response.

Male

Female

B Professional staff profilePlease provide a breakdown by number of your permanentlyemployed, fully qualified professional staff by the followingdisciplines:

Architects

Architectural Technologists

Building services engineers

Civil engineers

Other engineers

Technicians

Building Surveyors

Quantity Surveyors

Scientists

Business managers

Contract & project managers

Administrators

Legal/business professionals

Town planning professionals

Other construction professionals

23

Section 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 and

represents 25,000 firms and 500,000 individuals

Name Job Title/Function

Address

Postcode

Telephone

Email

[w1]

24


Davis Langdon Consultancy May 2007

Annex 2: Population

1

2 t

o 5

6 t

o 1

0

11 t

o25

26 t

o 5

0

51 t

o 1

00

101 t

o 2

00

201 t

o 5

00

501 t

hro

ug

h t

o h

igh

est

No

siz

e d

eta

ils

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



For more information contact:

Mark Way,Director of Skills,

CIC,26 Store Street,

LondonWC1E 7BT

e: [email protected]: 020 7399 7400

SURVEY METHOLOGY 23/11/07 16:22 Page 2

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