Rising uncertainty, a soft economic climate and the pace of change are the key challenges for environmental consulting, shows a WME poll.

Expectations of spending on environmental consultants have dropped over the last two years, reveals WME’s biannual survey of the sector. While that is a discernable, if weak, trend in the responses of nearly 200 organisations across local government and the economy, anecdotal responses from consultants themselves suggest work has slowed.

“The Federal Government’s economic stimulus package has provided 90 per cent of the business this financial year. It will be interesting to see what happens next year in the industry,” reported one.

But it is not just a softer economy to blame. Others point to the uncertainty around government policy and programs, particularly over the emissions trading scheme and “climate fatigue” in general, but also other missteps such as the drawn out debate over the resource rent tax on the mining industry.

“This has resulted in clients being more cautious about commissioning work and commencing on new projects.

This has had a recognisable impact on company turnover, although this has not been sufficient to affect staffing levels,” said another.

In 2008 around 66 per cent of respondents expected to spend between $10,000 and $50,000 in the following 12 months. That has now fallen to 52 per cent for the year ahead. The poll suggests the new economic and regulatory climate has also shaped the type of jobs, with a drop in the number of hires focusing on planning and strategic advice.

“The market is much tighter, unwillingness to spend, very competitive,” wrote one consultant, while another reported “increasing fix price business due to competition”.

Change, and other issues
A range of other issues floated to the surface, including the perennials of staff shortages and varying views on industry consolidation. A potential sleeper issue though is the rising cost of insurance as the “BP stuff-up effect” hits our shores. “Public liability insurance went up $10,000 on first quote,” noted one in the sector.

From a client perspective, satisfaction with the industry remains unchanged, with only seven per cent rating value for money as too expensive. The most common gripe – other than the ever-present complaint about consultants not understanding the individual business context – is an inability to keep up with the pace of change.

This reared its head in 2008, with consultants themselves reporting the pressure to cope with rapidly changing regulation, technology and initiatives in different states. This time round it cropped up in client feedback.

“There seems to be a reluctance to be the first to embrace new technology,” said one client. Another noted the need for consultants to “ensure they are up-to-date with legislative changes and proposed changes so that their services are flexible enough to cater for this”. The pressure, unfortunately, is unlikely to ease.

For the full survey results visit www.wme.com.au/magazine