This is the market’s second consecutive decline after more than two decades of unbroken growth, according to a report from Environment Analyst. The decline was chiefly due to government austerity and the curtailing of local authority expenditure.
As a result of this, the top 32 firms in the sector have collectively shedded just under 1,000 jobs – and the prospect of future growth looks uncertain as the market is predicted to flatlin.
According to the report, between 2009 and 2010, £79m in public spend was lost from the environmental consulting market equating to 70% of the overall decline. The private sector declined less sharply in 2010, losing £34m. Despite this, sales to the regulated industries increased by £14m.
In terms of service areas, environmental impact assessment and sustainable development remains the top income generator, despite a 12% contraction in revenue in 2010 to £168m.
Contaminated land contracted by only 3.4% to £159m, much less than the previous year when revenue shrank by more than a fifth as a result of the decimation of the house-building sector.
Turnover from climate change and energy services, at £136m, superseded that from waste management services for the first time after the latter underwent double-digit contraction in 2010 to stand at £121m.
The only service offering which substantially grew during 2010 was environmental/sustainability policy and strategy which grew by 14.7%. This is an indicator, perhaps, of increased CSR activities and investor pressure on multinational firms.
The report’s co-author Stuart Foxon said: “The depth of the recession surprised many environmental consultancy managers. Unlike 2009, in 2010 it became apparent that a reliance on public sector projects would hit the sector hard.”
Looking ahead, the report predicts that the market will grow slightly by 0.5% in 2011, compared with the projected GDP increase of 1.1%. Ecological/landscape services, climate change and energy, EIA and sustainable development, and environmental/sustainability policy and strategy services are expected to be the strongest growth areas.
Maxine Perella