‘Lean times’ ahead for design groups in Asia…

UK designers working in south-east Asia are being advised to be paid in US dollars and to run a credit check on clients following the souring of the region’s economic conditions.

Design groups there must prepare for lean times, advises Brian Sturgess, emerging markets expert at investment bank ING Baring.

Many consultancies, including Sampson Tyrrell Enterprise, Design Bridge, Landor Associates and Met Studio, have enough work to see them through the next six months, but have experienced a fall-off in demand for their services. Designers working for Asian clients, rather than for the multinationals operating there, will be particularly hard hit. Of all sectors, retail is expected to suffer most.

It is too early to assess how deep or how long the Asian recession will be. Thailand, first in the region to be hit, is suffering chronic inflation and bad debt. Indonesia and Malaysia are starting to be hit by similar debt crises and currency deflation. Hong Kong is predicted to follow.

Japan and Korea, which have solid export markets and well-developed manufacturing and economic bases, modelled on more western lines, are forecast to remain relatively stable. The Department of Trade and Industry says it sees no immediate cause for concern.

But Design Bridge managing director David Rivett says: “If the currency is halved, the real cost of working with an overseas consultant has doubled. Our clients is going to assess whether our service is really useful.”

He is considering local resources for implementation and artwork, and focusing on conceptual and strategic work in order to keep costs down. The long-term nature of building client-consultant relations in Asia means groups are ruling out a short-term response to, and withdrawal from, the economic situation.

See News Analysis, page 7