Alastair Stewart on why quantity surveyors are survivors

The asteroid that hit our planet 65 million years ago wiped out all land-based dinosaurs (the flying varieties evolved into birds) and three quarters of all the remaining animals. Most insects perished due to their rapidly dwindling meat-based diets. Not so cockroaches, which are omnivore scavengers, eating both plant and animal matter and, as my daughter’s homework website puts it, “aren’t picky eaters”.

Admittedly, economic downturns cannot compare to near-apocalypses. But in the aftermath of the global financial crisis of 2008, total construction employment fell by almost half a million, to 2.1 million. Tales were legion of brickies leaving the industry for good, to become cab drivers.

Not so those ever-evolving surveyors. The building development cupboard was pretty bare and, thus, their staple income of cost consultancy and estimating. But they merely sought out alternative sources of nourishment. Often, it seems, in the misery facing less adaptable members of the construction kingdom.

I was at a rather boozy pre-Christmas industry bash a year into the downturn and there were quite a few glum faces. But a handful were touting themselves as restructuring experts, claims consultants, lending risk advisers and similarly esoteric titles. “How long have you been doing that?” I enquired. “Oh, not long. We used to be QSs.”

Stricken companies, for instance, wanted to figure out how to get out of the mess they’d found themselves in; banks, in turn, were hiring them to claw back some of their previously effusive lending. The number of claims and counterclaims, of course, soared. Latest sources of work appear to be private equity and family offices. All good work if you could get it.

QSs’ key skill in this regard is that they are uniquely placed to, in the words of All the President’s Men, “follow the money”.

It’s also noteworthy that they can shrink to fit changing environments. Cockroaches were around some 360 million years before the dinosaurs and were then twice the size of today’s descendants. Apart from tastes in food, what assured the prolongation of the species was some of them were smaller and flatter, allowing the lucky ones to find cover between rocks ahead of 15 years of worldwide darkness.

At risk of stretching the metaphor to extinction, compare surveyors with their fellow professionals: architects. Individual QSs need only a laptop and well-stocked phone contact list. Archetypically, design practices favour cool offices in trendy addresses, with expensive computer-aided kit. Not to mention upscale coffee machines. They are also first in property’s feeding chain to see fees collapsing in downturns.

Right now, QSs find themselves enjoying the best of both worlds. Housebuilding workloads are down more than most industry sectors, but developers are still building. While materials and labour rates have fallen almost across the board, a couple of chief executives tell me surveyors are the only group that are hard to recruit and retain.

At the same time, there is the incongruous situation that company insolvencies are soaring to levels more in line with previous full-on slumps. Inflation and soaring borrowing costs are mainly to blame, according to corporate rescue specialist Begbies Traynor, which has reported that the number of construction and property services companies facing critical financial distress rose by 33% and 25% respectively between Q3 and Q4. Construction tops the list of industries facing critical financial distress, 7,849 companies, with 83,332 in “significant” distress, while real estate and property services are in third place at 6,228 and 62,176 respectively.

The next couple of quarters could be even tougher, according to site gossip, with rain, wind and freezing temperatures vying to disrupt construction programmes and, no doubt, tip more companies over the edge.

Presumably, insolvency work is more lucrative, especially for the more experienced hands, than filling out ‘bills of quantity’. That might explain why one housebuilding boss told me: “Experienced estimators are in short supply. The younger cohort are unfamiliar with the cycle we are in.”

Either may eventually be even harder to hire. Quantity surveying was never at the top of UCAS wish lists for university applicants, nor their parents. An architectural photographer asked me recently: “Would you prefer to say your kids were studying architecture… or quantity surveying?” I had to think about that and – in the highly unlikely event they’d pay a blind bit of notice – I’d suggest they consider the fate of the dinosaurs.

Alastair Stewart is an equities analyst and consultant