Keeping heads above water

There have been some major shifts in the status of the market for process engineering projects over the past 12 months, in terms of the type, size and duration of contracts, as well as where the work is coming from.

“In the past, a contractor could be confident that they would secure a 12-month assignment - often with the option to extend that - whereas the recession has triggered a change,” explained Sarah Taylor, associate director and oil and gas specialist with energy talent agency NES Global. Requirements now, she added, tend to be for three- or four-month contracts in order to minimise risk in a recessionary environment.

“There are more upstream exploration projects coming through and more principal/lead-level roles that are much more specialist than less senior vacancies,” noted Taylor. In addition, she said, overseas projects are creating conceptual/FEED stage work within the UK, which is proving a particular boon in the present economic climate.

Confirmation that work outside of the UK is available comes from Protel Associates, which provides sales intelligence for equipment and service suppliers to the main process industries in the UK and Ireland.

In its recent Process Industry Market Trend study, Protel reported that engineering houses in general are looking to other European markets in the short- to medium-term. This, it said, is especially true of the major houses in Ireland, where significant work for projects in Benelux, Switzerland and Scandinavia is currently underway.

Other strong performers include engineering houses with specialist expertise, and/or those involved with particular UK and Irish sectors that remain active, such as food and beverage and nuclear. The market is also characterised by a greater number of shorter-term contracts than normal.

Reviewing the most buoyant industry sector markets at present, Taylor reported: “The water utilities sector is busy due to demand from AMP5 (the asset management plan period that runs between 2010 and 2015). The energy - oil and gas, nuclear and renewables - sectors are steadily improving and at NES Global, within the UK, we’ve seen a rise in enquiries from manufacturing industries.”

Although there is clear evidence of UK-based contract engineers seeking work abroad, for example on major Middle East contracts, “this hasn’t been in droves,” said Taylor, who has teams in place worldwide to support contractors seeking to expand the geographic boundaries of their job search.

“While the UK has been quiet, some contractors have opted to look into Europe and the Middle East for the right assignment,” says the agency. “A global market means that they can go outside the UK for work - often on a rotational basis to minimise disruption to family life/schooling and so on - and then look for UK roles as market conditions improve.”

Protel supports this viewpoint of the importance of specialist expertise and a willingness to seek work outside the UK. It cites how the PM Rugby engineering house, for example, is benefiting from focusing on pharma projects in Belgium in addition to key pharma accounts within the UK, such as GSK Worthing.

Global term contracts also are yielding work with major companies in the UK, with Jacobs Engineering and Aker Solutions, for instance, doing well in various overseas markets and feeding design work back to the UK. Foster Wheeler has, likewise, reported a strong overseas performance in various markets, passing on much of the associated design work to its UK offices. This includes its work with the Iraqi Ministry of Oil on a new grassroots refinery at Nassiriya in southern Iraq.

This overseas activity for Foster Wheeler is in sharp contrast with its activities in the domestic pharmaceuticals sector, which it recently described as “virtually dead”. For its part, AMEC is currently focusing on major infrastructure projects, particularly in nuclear and term contracts, such as the recent South Hook LNG Terminal award.

Protel also points out that another prominent player, Lorien, continues to be busy within its traditional brewing sector. The firm has opened an office in Poland, which is generating projects for the UK. Meanwhile, engineers at both Clegg and Chalcroft are reportedly busy in the food and beverage sector.

In terms of pay rates, Taylor at NES Global reported that over the last 12 months, salaries have remained relatively stable, though rates for contract opportunities - at least as far as the UK market is concerned - have decreased.

“That said, things are improving and roles where we’d seen rates fall have since begun to slowly creep up again,” commented the NES Global director, who is cautiously optimistic about the year ahead. “The outlook for 2011 is that we’ll continue to see gradual signs of improvement - with several projects scheduled to be won by UK companies.”