A Government survey has revealed a sharp fall in the gross operating surplus of professional property companies. The annual survey of the building, construction and property sectors in Hong Kong showed the surplus fell 32 per cent in 2000, while the sector lost 14 per cent of its participants due to fierce competition amid the market slowdown. It also indicated that the number of architectural, surveying and project engineering companies fell to 1,164 in 2000. Their gross operating surplus of HK$844 million meant each company generated a profit of HK$725,000 in the year. SK Pang Surveyors' managing director Pang Siu-kee said the data did not fully reflect the poor conditions in the sector. However, it did reveal a trend of severe contraction in architectural, surveying and project engineering firms, usually involved in the initial stage of the property development process, Mr Pang said. 'Professional firms have to cut consultancy charges to fight for more jobs amid fierce competition in a sluggish market, especially those of a smaller scale,' he said. Mr Pang agreed there had been a substantial decrease in profit margins in recent years. 'Normally, we have [a profit margin of] 25 to 30 per cent, but now it has been squeezed to below 10 per cent.' He expected profit margins to slide to less than 5 per cent if the property market did not turn around within the year. 'The situation could improve if the Government contracted out more jobs, cut them into smaller pieces . . . for private firms,' Mr Pang said.