Reality bites

As the realities of the global recession hit home, the second state of the market survey from the Association for Project Management reveals a changing marketplace and optimism in short supply.

Any initial optimism appears to have ebbed away, as project professionals report a big increase in the recessionary impact on projects. The second state of project management survey amongst APM members shows 26 per cent of respondents greatly affected by the global economic downturn, compared to a little over 13 per cent in the first quarter of the year.

This is hardly surprising, considering the magnitude of the current crisis, but the drop in confidence is still worth noting. In a little over three months, the majority view has reduced from 32 per cent not at all affected to 14 per cent (see Fig 1). Proof, perhaps, that the bubble of invincibility, hinted at in the previous survey, has well and truly burst.

The picture in the business community is equally bleak. When asked: To what extent has the global economy affected the business you work in? The majority of those questioned, 28 per cent, said greatly and only seven per cent not at all. This represents a definite shift and is, perhaps, indicative of the widespread recessionary impact on businesses across all industry sectors.

(Above - Fig.1 - To what extent has the global economy affected the projects you are working on?)

Global Players

The depth and scale of recession is also reflected in the question: Where are project management skills the strongest? Respondents reverted to type and named the UK (75 per cent) and US (61 per cent) as the big global players. Looking ahead and there are warning signs for the old order. Asked to predict who the key players will be in the next five years, Europe, Japan/SE Asia and China and Asia all show moderate increases, while the UK and US drop between two and five per cent. This hardly marks a major shift, or radical re-ordering of the project management skills- base, but may indicate an underlying lack of confidence in the ability of the big two to recover from the effects of the recession.

These sentiments are echoed in later questions, where a drop-off in UK-based project work, from 25 per cent to 17 per cent, again raises questions about the durability of established markets. This assumption is supported by moderate levels of growth in the one to 25 per cent category of firms with work conducted internationally.

Recession

(Above - Fig.2 - State of project management market)

The impact of the recession on the day-to-day running of projects is felt most keenly in terms of actual expenditure. Budgetary constraints remain the most pressing concern, with 56 per cent of respondents citing budget ahead of time and scope.

But the general sense of malaise is perhaps best summed up by the perceived state of the project management market (see Fig 2). Only two per cent describe it as very buoyant, while 13 per cent believe the market is not at all buoyant, an eight per cent increase on last time.

The majority feeling, however, is still one of uncertainty. In line with results from the previous survey, where only a small number were prepared to get off the fence and express a strong opinion, 40 per cent opt for the middle ground, underlining the lack of confidence in the market at present.

This trend is repeated in questions that track levels of optimism in the project industry. Overall, the number of professionals who feel less optimistic increased by 12 per, while those who feel more optimistic dropped to 40 per cent, a fall of 10 per cent.

Positive

(Above - Fig.3 - Looking forward six months how optimistic will you be about the project management industry?)

When asked to comment on the industry moving forward, the general consensus is that things will improve towards the back-end of the year (see Fig 3). This renewed sense of optimism is in stark contrast to early predictions, where only 14 per cent of project professionals felt optimistic about the future prospects of the industry, compared to 46 per cent of those surveyed more recently.

The key message here is that the industry is in a trough but for those prepared to tough it out and stay positive there are signs that green shoots maybe just around the corner.