Table of Contents
Executive Summary
-
- The market
- Investment in transport infrastructure drives recent growth in civil engineering construction output
-
- Figure 1: New civil engineering construction output in Great Britain, 2015-19
- Rail represents largest sector for civil engineering construction activity in 2019
- Civil engineering activity in electricity sector slows in 2018 and 2019
- Roads represent third largest sector for civil engineering construction activity in 2019
-
- Figure 2: Civil engineering construction output in Great Britain, by sector, 2019, (% of total)
- Outlook for UK civil engineering sector remains positive, but with uncertainty over the delivery of major projects
-
- Figure 3: Forecast new civil engineering construction output in Great Britain, 2020-24
- Government’s infrastructure pipeline criticised for being a “wishlist”, leading to volatile and unpredictable demand in construction industry
- Companies and brands
- Major Civils contractors launch transformation programmes as low margin bidding and project delays lead to financial difficulties
- Trend towards long-term partnerships and alliances, especially in utilities sector
- What we think
Issues and Insights
-
- While the government’s commitment to significant infrastructure spending provides a positive impetus for civil engineering demand, the vague pipeline of projects is leading to volatile and unpredictable demand
- The facts
- The implications
The Market – What You Need to Know
-
- Investment in transport infrastructure drives recent growth in civil engineering construction output
- Rail represents largest sector for civil engineering construction activity in 2019
- Civil engineering activity in electricity sector slows in 2018 and 2019
- Roads represent third largest sector for civil engineering construction activity in 2019
- Outlook for UK civil engineering sector remains positive, but timing of delivery of a number of major projects remains highly unpredictable
- Government’s infrastructure pipeline criticised for being a “wish list”, leading to volatile and unpredictable demand in construction industry
- Skills shortages continue to pose challenges for industry
Market Size
-
-
- Figure 4: Civil engineering construction output in Great Britain, 2015-19
-
- Figure 5: Civil engineering construction output in Great Britain, 2015-19
-
- Figure 6: Total new construction and civil engineering output in Great Britain, 2015-19
-
Market Segmentation
-
-
- Figure 7: Civil engineering construction output in Great Britain, by sector, 2015-198
- Figure 8: Civil engineering construction output in Great Britain, by sector, 2015-19
- Regional civil engineering construction output
-
- Figure 9: Analysis of civil engineering output, by region, 2016-18
-
Water & Sewerage Sector
-
- Water & sewerage capital expenditure
-
- Figure 10: UK capital expenditure on water and sewerage services, 2015/16-2018/19
- Water civil engineering construction output
-
- Figure 11: Civil engineering construction output for the potable water industry in Great Britain, 2015-19
- Sewerage civil engineering construction output
-
- Figure 12: Civil engineering construction output for the sewerage industry in Great Britain, 2015-19
Electricity Sector
-
- Electricity distribution capital expenditure
-
- Figure 13: UK gross capital expenditure by electricity distribution network operators, 2013/14-2018/19
- Figure 14: UK gross capital expenditure by electricity distribution network operators, 2013/14-2018/19
- Smart grid development to support low-carbon economy and aid transition to a more flexible energy system
- Increase in distributed generation
-
- Figure 15: Distributed generation connected to the distribution network, 2016/17, (MW)
- Electricity transmission capital expenditure
-
- Figure 16: Size of electricity transmission network in Great Britain, 2019
-
- Figure 17: Capital expenditure by the electricity transmission industry in Great Britain, 2014/15-2018/19
- Figure 18: Capital expenditure by the electricity transmission industry in Great Britain, 2014/15-2018/19
- The electricity generation mix
-
- Figure 19: Analysis of electricity generation in the UK, by type of fuel used, 2014-18
- Figure 20: Proportional importance of fuel source in UK electricity generation, 2014 and 2018
- Electricity civil engineering construction output
-
- Figure 21: Civil engineering construction output for the electricity industry in Great Britain, 2015-19
-
- Figure 22: Civil engineering construction output for the electricity industry in Great Britain, 2015-19
Gas Sector
-
- Industry Overview
- Gas capital expenditure
-
- Figure 23: Total gas transmission and distribution capital expenditure, 2014/15-2018/19
-
- Figure 24: Total gas transmission capital expenditure, 2014/15-2018/19
-
- Figure 25: Total gas distribution capital expenditure, 2014/15-2018/19
- Figure 26: Total gas transmission and distribution capital expenditure, 2014/15-2018/19
- Replacement expenditure dominated by Iron Mains Replacement Programme
-
- Figure 27: Length of iron gas mains replaced, by distribution network operator, 2013-18
- Gas civil engineering construction output
-
- Figure 28: Civil engineering construction output for the gas industry in Great Britain, 2014-18
Airports Sector
-
-
- Figure 29: 10 largest airports in the UK, by air transport movements, 2014-18
-
- Figure 30: Civil engineering construction output for the air transport industry in Great Britain, 2015-19
-
Communications Sector
-
- Overview
-
- Figure 31: Key market developments in the telecoms sector, 2013-18, (millions)
- Mobile networks
- Broadband networks
-
- Figure 32: Civil engineering construction output for the communications industry in Great Britain, 2015-19
- Figure 33: Civil engineering construction output for the communications industry in Great Britain, 2015-19
Railways Sector
-
- Major rail modernisation programme has posed significant challenges for Network Rail
- Enhancements and renewals expenditure
-
- Figure 34: Analysis of enhancement expenditure in Great Britain, by type, 2015-19
- Figure 35: Renewal expenditure by asset, 2018 and 2019
- Railways civil engineering output
-
- Figure 36: Civil engineering construction output for the rail transport sector in Great Britain, 2015-19
Harbours Sector
-
- Overview
- Recent port expansion projects
-
- Figure 37: Civil engineering construction output for the harbours and waterways sectors in Great Britain, 2015-19
Roads Sector
-
- Overview
-
- Figure 38: Road network in Great Britain, by type, 2018
- Figure 39: Road network expenditure in England, by activity and road type, 2012/13-2016/17
-
- Figure 40: New construction and improvements of roads, motorways and all-purpose trunk roads, in England, 2014/15-2018/19, (kilometres)
- Challenges with the Road Investment Strategy
- Civil engineering construction output
-
- Figure 41: Civil engineering new road construction output in Great Britain, 2015-19
-
- Figure 42: Civil engineering new road construction output in Great Britain, 2015-19
Market Forecast
-
- Civil engineering construction forecast
-
- Figure 43: Forecast civil engineering construction output in Great Britain, 2020-24
- Figure 44: Forecast new civil engineering construction output in Great Britain, 2020-24
- Infrastructure investment at the heart of the government’s plans to close the UK’s productivity gap
- Infrastructure investment named as one of the five foundations of the government’s industrial strategy
- First National Infrastructure Assessment published in 2018
- National Infrastructure Strategy to set out details of £100 billion investment
- Government launches productivity programme for infrastructure
- National Infrastructure and Construction Pipeline
- NICP criticised for being a “wish list”, leading to volatile and unpredictable demand in the construction industry
-
- Figure 45: National Infrastructure and Construction Pipeline, by sector, as of autumn 2018
- Figure 46: National Infrastructure and Construction Pipeline, by sector, as of autumn 2018
Water & Sewerage Sector Forecast
-
- Move towards totex in AMP6 and beyond set to reduce bias towards capital spending
- Move towards long-term alliances and frameworks across industry
- English water companies plan to spend a record £50 billion+ in AMP7 (2020-25)
- Major water and sewerage capital projects in the pipeline
-
- Figure 47: Water & sewerage infrastructure pipeline, as of autumn 2018
- Thames Tideway Tunnel
-
- Figure 48: Estimated cost of Thames Tideway Tunnel, 2016/17-2021/22+
- Forecast civil engineering construction in water sector
-
- Figure 49: Forecast civil engineering output for the water sector, 2020-24
- Forecast civil engineering construction in the sewerage sector
-
- Figure 50: Forecast civil engineering output for the sewerage sector, 2020-24
Electricity Sector Forecast
-
- Electricity infrastructure projects in the National Infrastructure and Construction Pipeline
-
- Figure 51: Electricity infrastructure pipeline, as of autumn 2018
- Renewables capacity development pipeline
-
- Figure 52: Renewable energy projects in pipeline, by technology, as of September 2019
- Civil engineering construction forecast in the electricity sector
-
- Figure 53: Forecast civil engineering output for the electricity sector, 2020-24
- Figure 54: Forecast civil engineering output for the electricity sector, 2020-24
Gas Sector Forecast
-
- Gas infrastructure projects in the National Infrastructure and Construction Pipeline
-
- Figure 55: gas distribution and transmission infrastructure pipeline, as of autumn 2018
- Transmission network capex forecast
-
- Figure 56: Annual capital expenditure plans by National Grid Gas under RIIO-T1, by category, 2013/14-2020/21
- Distribution network capex forecast
-
- Figure 57: Annual capex plans under RIIO-GD1, by GDN, 2013/14-2020/21
-
- Figure 58: Annual repex plans under RIIO-GD1, by GDN, 2013/14-2020/21
- Figure 59: Forecast total capex and repex during RIIO-GD1, 2013/14-2020/21
- Civil engineering construction forecast in the gas sector
-
- Figure 60: Forecast civil engineering output for the gas sector, 2020-24
Airport Sector Forecast
-
-
- Figure 61: Forecast civil engineering output for the airports sector, 2020-24
-
Communications Sector Forecast
-
- Communications infrastructure projects pipeline
-
- Figure 62: Communications infrastructure pipeline, 2019-21
- Civil engineering construction forecast in the communications sector
-
- Figure 63: Forecast civil engineering output for the communications sector, 2020-24
Railways Sector Forecast
-
- Detailed £10 billion rail enhancement pipeline revealed
- Rail industry calls for long-term strategies which promote private investment in the sector
- HS2 set to dominate rail infrastructure spending, but go-ahead still pending government’s final decision
- Other proposed new major rail lines
- Northern Powerhouse Rail (formerly known as HS3)
- Crossrail 2
- Rail infrastructure projects pipeline
-
- Figure 64: Rail infrastructure projects pipeline, 2018
- Civil engineering construction forecast in the rail sector
-
- Figure 65: Forecast civil engineering output for the rail sector, 2020-24
Harbours Sector Forecast
-
-
- Figure 66: Forecast civil engineering output for the harbours sector, 2020-24
-
Roads Sector Forecast
-
- Government confirms further increase in road investment for period 2020-25
- Civil engineering construction forecast in the roads sector
-
- Figure 67: Forecast civil engineering output for the roads sector, 2020-24
- Figure 68: Forecast civil engineering output for the roads sector, 2020-24
Market Drivers – Water & Sewerage Sector
-
- Future challenges facing the water and sewerage sector
-
- Figure 69: population projections for England, by region, 2016-36
- Industry regulation
- Legislative environment
- European Water Framework Directive
- Urban Waste Water Treatment Directive
- The Drinking Water Directive
- Revised Bathing Water Directive
- Transfer of private sewers in England and Wales
- The Flood and Water Management Act 2010
- Implications of Brexit on the UK water and sewerage sector
Market Drivers – Gas & Electricity Sectors
-
- Price controls
- Government commitment to reduce carbon emissions
- UK makes good progress in reducing CO2 emissions to date, but on track to miss targets between 2023 and 2032
- Policies to decarbonise electricity
- Renewables Obligation
- Feed-in Tariffs
- Carbon Price Floor
- Contracts for Difference
- Capacity Market
- The Renewable Heat Incentive
Market Drivers – Airports Sector
-
- Government backs construction of third runway at Heathrow Airport but go-ahead still uncertain
Market Drivers – Communications Sector
-
- Government identifies roll-out of 5G and full-fibre connections as priority areas of investment
Market Drivers – Railways Sector
-
- Drivers of investment in rail industry
- Rail network funding and regulation
- Network Rail launches transformation plan in 2016
- Government publishes its strategic vision for rail
- Network Rail to spend £42 billion on rail improvements in CP6 (2019-24)
Market Drivers – Ports & Harbours Sector
-
- UK port demand set to increase
Market Drivers – Roads Sector
-
- Government commits to biggest programme of road investment since the 1970s
- Government confirms further increase in road investment over 2020-25
Companies and Brands – What You Need to Know
-
- Balfour Beatty focusses on specific markets with inherent growth where it has the right expertise
- Skanska undergoes restructuring to improve performance and focus on core business
- Costain launches “leading edge” strategy
Industry Structure
-
- Trend towards long-term partnerships and alliances, especially in utilities sector
- Civil engineering companies are required to develop a wider set of skills and competencies
- Major civils contractors launch transformation programmes as low margin bidding and project delays lead to financial difficulties
- The government’s NICP has been criticised for being misleading and causing instability in the industry
- Industry development
-
- Figure 70: Analysis of the civil engineering industry by type of activity and company size, 2019, (number of employees and number of companies)
- Figure 71: Analysis of the civil engineering industry by type of activity, number of companies and % of total, 2019
Company Profiles
-
- Introduction
- Balfour Beatty
- Build to Last transformation programme launched in 2015
- Balfour Beatty expects the outlook for infrastructure market to remain positive
- Financial performance
-
- Figure 72: Financial analysis of Balfour Beatty, 2014-18
- Figure 73: Turnover analysis of Balfour Beatty, by segment, 2016-18
- Costain Group
- “Leading edge” strategy
- Financial performance
-
- Figure 74: Financial analysis of Costain Group, 2014-18
- Figure 75: Turnover analysis of Costain Group, by segment, 2014-18
- J Murphy & Sons
- Group strategy
- Financial performance
-
- Figure 76: Financial analysis of J Murphy & Sons, 2014-18
- Bam Nuttall
- Company performance and outlook
-
- Figure 77: Financial analysis of Bam Nuttall, 2014-18
- Skanska UK
- Skanska’s Profit with Purpose business plan
- Skanska undergoes restructuring to improve performance and focus on core business
- Financial performance and outlook
-
- Figure 78: Financial analysis of Skanska UK, 2014-18
- Galliford Try Infrastructure
- Galliford Try pulls out of bidding for large fixed-price infrastructure projects
- Strategy
- Financial performance and outlook
-
- Figure 79: Financial analysis of Galliford Try Infrastructure, 2014-18
Appendix – Data Sources, Abbreviations and Supporting Information
-
- Abbreviations
- Methodology
Further Sources and Contacts
-
- Trade associations
- Trade magazines
- Construction News
- Trade events
Back to top