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The private sector in the coming year will be dominated by the same factor that overshadowed the second half of 2002: the slowdown in the office sector. The partial collapse of the IT and telecoms industries over the past two years has had a knock-on effect on the demand for financial services in the City. This, together with pessimism about the prospects for economic growth in the wider economy, has discouraged commercial clients from beginning capital spending projects. Contractors say work has dried up in the West End of London, and developers do not expect the market to revive until at least 2004.

This has led some contractors, like Carillion and Mace, to consider cutting staff. And consultants in the commercial sector are turning to PFI deals or looking outside the UK.

So, an entirely depressing picture for the commercial sector? Well, there are bright spots. For example, developer Land Securities is pushing ahead with a £190m office block in central London; construction starts on 20 January. And demand for offices remains high in Liverpool, Manchester and Birmingham.

We should also remember that offices do not make up the entire commercial sector. Supermarket giants like Tesco and J Sainsbury have gargantuan build programmes – Sainsbury was the UK’s biggest client last year, letting nearly £500m of work. And Tesco is to embark on the rebranding and refurbishment of the 862 local stores it acquired after buying rival retailer T&S last October.

45% How much of the commercial sector is offices

33% How much of total UK workload is commercial

12% How much orders for offices fell in the year to 30 September