Design to bounce back in 2010

Financial experts are forecasting that, although business will get tougher for design consultancies in the first half of this year, the third and fourth quarters could see an upturn.

Ian Cochrane, managing director of management consultancy Ticegroup, says, ‘I think it could swing up as fast as it’s gone down,’ adding he agrees with WPP chief executive Mar- tin Sorrell’s recent comment that the downturn is likely to be ‘v-shaped and not bath-shaped’.

Amanda Merron, partner at accountant Willott Kingston Smith, sees 2009 being another tough year, and suggests that any upturn may not come until towards the end of the fourth quarter. ‘We won’t see the full impact hitting till Q2. In Q4 we’ll hit the bottom and come back, the results of which we’ll see in 2010,’ she says.

Cochrane says that a favourable exchange rate might allow UK consultancies to compete with the Far East. He explains, ‘China slowing down gives a chance to British manufacturers, too. People exporting are well positioned, with the exchange rate able to compete with the Far East.’

Creative industries advisor for UK Trade & Investment, Christine Losecaat, will take a trade mission to China this year. She agrees that, although the Chinese economy will slow down, ‘it will not go into reverse like Europe’, explaining that China needs a period of consolidation and ‘business shouldn’t be affected at all’.

Losecaat accepts that lower interest rates will make UK design more marketable abroad and suggests they may attract foreign business domestically. ‘The exchange rate is very much in our favour,’ she explains. ‘We continue to attract international design centres to London, such as those of Samsung and LG.’ Cochrane advises against design groups taking on work from sectors that have been badly hit in 2008, but suggests the most innovative consultancies will still be able to work in these areas.

He explains, ‘The drinks industry is shot, and the financial and retail sectors are clearly damaged. These businesses have to come up with new formats, and consultancies have to look at how cheaply and effectively they can help clients innovate.’

Losecaat predicts that branding opportunities for UK consultancies will become more abundant in Russia this year, although she says in China it is too early for this. ‘In China, work still centres around industrial design, design management and retail interiors,’ she explains.

A survey, released by the Design Council this week, suggests that British businesses are turning to design, despite the recession. It claims that, of the 1500 businesses questioned, 53 per cent agree that design is integral to the UK’s future economic performance, and 54 per cent say they will use design to help survive the recession.

Predictions and advice for 2009

• Q1, Q2 and Q3 look potentially tough, but there could be an upturn as early as Q4

• Think about the cost of redundancies – making a redundancy can cost a consultancy as much as £16 000, according to Christine Losecaat, creative industries advisor for UK Trade & Investment

• A lower exchange rate bodes well for overseas design buyers and UK exporters

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