Understanding UK construction professional services exports: definitions and characteristics

Abstract

Services are very important to the UK balance of trade; a surplus has been recorded for trade in services every year since 1966. Construction professional services exports (CPS), which cover architecture, engineering and surveying (AES), have also increased, contributing over £3bn to the UK trade balance in 2007. The changing environment of construction professional services exports complicates the validity of the characteristics and definitions of services as described in the research literature and official export statistics. Through semi‐structured interviews undertaken with large consulting engineers and a roundtable discussion with industry and government representatives, the research found that the impact of globalization and the changes in the construction business environment, such as increasing foreign ownership and changing forms of procurement, are not fully reflected in the official statistics. There have also been rapid changes in technology, procurement and methods of delivery which have impacted on exporting AES firms and a more appropriate set of characteristics is needed to better reflect the project‐specific and knowledge‐intensive nature of AES firms.

Keywords:

• Exports
• services
• construction
• globalization
• knowledge‐based economy

Notes

1. The WTO, formerly GATT, formulated the GATS (General Agreement on Trade in Services) Treaty in 1995.

2. Detailed annual estimates of UK balance of payments including estimates for the current account (trade in goods and services, income and current transfers); the capital account, the financial account and the international investment position.

3. World Trade Organization, General Agreement on Trade in Services (GATS). Mode 1—services supplied from one country to another (e.g. international telephone calls), officially known as ‘cross‐border supply’. Mode 2—consumers or firms making use of a service in another country (e.g. tourism), officially ‘consumption abroad’. Mode 3—a foreign company setting up subsidiaries or branches to provide services in another country (e.g. foreign banks setting up operations in a country), officially ‘commercial presence’. Mode 4—individuals travelling from their own country to supply services in another (e.g. fashion models or consultants), officially ‘presence of natural persons’.

4. Most of the 30 OECD members are high‐income economies and are regarded as developed countries.

5. United States, Japan, Germany, France, United Kingdom, Italy and Canada.