Table of Contents
Executive Summary
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- The market
- Following a very buoyant 2015, civil engineering activity slows in 2016
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- Figure 1: New civil engineering construction output in Great Britain, 201216
- Electricity infrastructure sector has shown the strongest growth over the past five years
- Roads sector accounts for a quarter of civil engineering construction output in 2016
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- Figure 2: New civil engineering construction output in Great Britain, by sector, 201216
- Civil engineering sector set for further strong growth over the next five years
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- Figure 3: Forecast new civil engineering construction output in Great Britain, 2017-21
- Market factors
- Government places infrastructure investment at the heart of ambitious plans to close the UK’s productivity gap
- The largest sector in the current infrastructure and construction pipeline is energy
- Companies
- Trend towards long-term alliances and closer, integrated relationships in the utilities sector
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- Figure 4: Analysis of the civil engineering industry by type of activity, number of companies & % of total, 2016
- What we think
Key Insights
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- What are the current government’s plans for infrastructure spending? Which sectors are set to attract the highest public and private spending?
- What are the potential implications of Brexit for UK Infrastructure investment?
- Is Brexit likely to exacerbate current labour skills shortages?
- Are frequent government policy changes affecting investor confidence in the renewable energy infrastructure sector?
- What does the adoption of a new regulatory framework in the water and sewerage industry mean for the supply chain, including civil engineering contractors?
Introduction
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- Definitions
- Methodology
- Abbreviations
- Market Positioning
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- Figure 5: Total New Construction and Civil Engineering Output in Great Britain, 201216
UK Economy
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- Overview
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- Figure 6: UK GDP quarterly development, 2003-16
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- Figure 7: UK GDP in economic downturns and recoveries since 1979
- Inflation
- Interest rates
- House prices
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- Figure 8: UK House price changes, 2004-2016
- Consumer spending
- Manufacturing
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- Figure 9: UK manufacturing, 2014-16
- Business investment
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- Figure 10: UK GFCF 2003-16
Market Factors
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- Water & Sewerage
- Industry regulation
- Legislative environment
- European Water Framework Directive (WFD)
- Urban Waste Water Treatment Directive (UWWTD)
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- Figure 11: Sewerage treatment enhancement expenditure driven by UWWTD in England & Wales, 1990-15
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- Figure 12: Sewerage treatment enhancement expenditure driven by UWWTD in England & Wales, 199015
- The Drinking Water Directive
- Revised Bathing Water Directive
- Implications of Brexit on the UK water and sewerage sector
- Transfer of private sewers in England and Wales
- Gas & Electricity
- Price Controls
- Environmental and Legislative Factors
- Carbon Budgets
- Climate Change Levy
- Climate Change Agreements
- Renewables Obligation
- Electricity Market Reform
- Contracts for Difference (CfDs)
- Capacity Market (CM)
- Airports
- Communications
- Railways
- Rail network funding and regulation
- Sir Peter Hendy’s re-plan for Network Rail’s enhancement programme 2014-19
- Drivers of investment in rail industry
- Additional funding for rail infrastructure announced in 2016 autumn statement
- High Speed Two (HS2) and proposed major schemes
- Ports & Harbours
- Roads
- Reform of Highways Agency
Market Size & Segmentation
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- Key points
- Market size
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- Figure 13: Civil engineering construction output in Great Britain, 2012-16
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- Figure 14: Civil engineering construction output in Great Britain, 2012-16
- Market segmentation
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- Figure 15: Civil engineering construction output in Great Britain, by sector, 2012-16
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- Figure 16: Civil engineering construction output in Great Britain, by sector, 2012 and 2016
Water & Sewerage Sector
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- Key points
- Water & Sewerage Capital Expenditure
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- Figure 17: Total capital expenditure by water and sewerage companies in England & Wales, 2005-10 and 2010-15
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- Figure 18: Total capital expenditure by water-only companies in England & Wales, 2005-2010 and 2010-2015
- Contracts for AMP5 tendered early to reduce boom and bust cycle
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- Figure 19: Actual UK capital expenditure on water and sewerage services, 2009/10-2014/15
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- Figure 20: UK capital expenditure on water and sewerage services, 2010/11-2014/15
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- Figure 21: UK Capital Expenditure on Water and Sewerage Services, 2010/11-2014/15
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- Figure 22: UK Capital Expenditure on Water and Sewerage Services, 2015/16
- Water Civil Engineering Construction Output
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- Figure 23: Civil engineering construction output for the potable water industry in Great Britain, 2012-16
- Sewerage Civil Engineering Construction Output
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- Figure 24: Civil engineering construction output for the sewerage industry in Great Britain, 2012-16
Electricity Sector
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- Key points
- Electricity Distribution Capital Expenditure
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- Figure 25: UK gross capital expenditure by electricity distribution network operators, 2011/122015/15
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- Figure 26: UK gross capital expenditure by the electricity distribution network operators, 2011/12-2015/16
- DNO’s total spending in DPCR5 is lower than set by Ofgem
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- Figure 27: Breakdown of total expenditure by DNOs during DPCR5, by area 20112015
- DPCR5 witnesses launch of Low Carbon Networks Fund
- Rapid increase in distributed generation connected to DNOs’ networks
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- Figure 28: Distributed Generation connected to the distribution network during DPCR5, 2011-15
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- Figure 29: Distributed Generation connected to the distribution network during DPCR5, 2011-15
- Electricity Transmission Capital Expenditure
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- Figure 30: Size of electricity transmission network in Great Britain, 2016
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- Figure 31: Capital expenditure by the electricity transmission industry in Great Britain, 2011/12-2015/16
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- Figure 32: Capital expenditure by the electricity transmission industry in Great Britain, 2011/12-2015/16
- The Electricity Generation Mix
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- Figure 33: Analysis of electricity supplied in the UK, by type of fuel used in generation, 2010-15
- Renewables generation
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- Figure 34: Renewable electricity generation in the UK, 2010-15
- Offshore Wind
- Offshore wind costs falling fast
- Green Investment Bank drive to boost investment in offshore wind
- Coal generation
- Nuclear generation
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- Figure 35: UK Nuclear Sites Planned Closure Dates, as of December 2016
- Planned new nuclear power development marred by major delays
- Gas/CCGT generation
- Government to prioritise new gas-fired power stations
- Distributed Generation
- Interconnectors
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- Figure 36: Existing and planned interconnectors, as of June 2016
- Electricity Civil Engineering Construction Output
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- Figure 37: Civil Engineering Construction Output for the Electricity Industry in Great Britain, 2012-16
Gas Sector
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- Key points
- Industry overview
- Gas Capital Expenditure
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- Figure 39: Total gas transmission and distribution capital expenditure, 2011/12-2015/16
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- Figure 40: Total gas transmission capital expenditure, 2011/12-15/16
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- Figure 41: Total gas distribution capital expenditure, 2011/12-2015/16
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- Figure 42: Total gas transmission and distribution capital expenditure, 2011/122015/16
- Replacement Expenditure (Repex)
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- Figure 43: Cumulative replacement expenditure during GDPRC1 2008-13, by GDN and type
- Civil Engineering Construction Output
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- Figure 44: Civil Engineering Construction Output for the Gas Industry in Great Britain, 2012-16
Airports Sector
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- Key points
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- Figure 45: 10 largest airports in the UK, 2010-15
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- Figure 46: Civil engineering construction output for the air transport industry in Great Britain, 2011-15
Communications Sector
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- Key points
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- Figure 48: Key market developments in the Telecoms Sector, 2010-15
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- Figure 49: Civil Engineering Construction Output for the Communications Industry in Great Britain, 2012-16
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- Figure 50: Civil engineering construction output for the communications industry in Great Britain, 2011-15
Railways Sector
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- Key points
- Capital Expenditure
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- Figure 51: Renewal expenditure by asset, 2015 and 2016
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- Figure 52: Private sector investment in track and signalling, 2012-16
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- Figure 53: Private sector investment in stations, 2012-16
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- Figure 54: Analysis of enhancement expenditure in England and Wales, by type, 2010-14
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- Figure 55: Analysis of enhancement expenditure on non-PR08 funded schemes by type, 2010-14
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- Figure 56: Analysis of enhancement expenditure in Scotland, by type, 2010-2014
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- Figure 57: Analysis of enhancement expenditure in Great Britain, by type, 2015
- Railways Civil Engineering Output
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- Figure 58: Civil Engineering Construction Output for the Rail Transport Sector in Great Britain, 2012-16
Harbours Sector
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- Key points
- Overview
- Recent port expansion projects
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- Figure 59: Civil engineering construction output for the harbours and waterways sectors in Great Britain, 2012-16
Roads Sector
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- Key points
- Overview
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- Figure 60: Road Network in Great Britain, by Type, 2015
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- Figure 61: Road Network Expenditure in England, by Activity and Road Type, 2010/11-2014/15
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- Figure 62: New Construction and Improvements of Roads, Motorways and All Purpose Trunk Roads, in England, 2011/12-2015/16
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- Figure 63: Civil engineering new road construction output in Great Britain, 2012-16
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- Figure 64: Civil Engineering New Road Construction Output in Great Britain, 2012-16
Seasonality Of Civil Engineering Construction Output
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- Overall
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- Figure 65: Seasonality of civil engineering, 2011-15
- Water
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- Figure 66: Seasonality of Civil Engineering Output in the Water Sector, 2011-15
- Sewerage
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- Figure 67: Seasonality of Civil Engineering Output in the Sewerage Sector, 2011-15
- Electricity
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- Figure 68: Seasonality of Civil Engineering Output in the Electricity Sector, 2011-15
- Gas, Communications and Air Transport
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- Figure 69: Seasonality of Civil Engineering Output in the Gas, Communications and Air Sector, 2011-15
- Railways
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- Figure 70: Seasonality of Civil Engineering Output in the Railways Sector, 2011-15
- Harbours
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- Figure 71: Seasonality of Civil Engineering Output in the Harbours Sector, 2011-15
- Roads
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- Figure 72: Seasonality of Civil Engineering Output in the Roads Sector, 2011-15
Regional Civil Engineering Construction Output
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- Figure 73: Analysis of civil engineering output, by region, 2011-15
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Industry Structure
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- Key points
- Industry Development
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- Figure 74: Analysis of The Civil Engineering Industry By Type of Activity and Company Size, 2016
- Company profiles
Amec Foster Wheeler
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- Figure 75: Financial analysis of AMEC Foster Wheeler, 2011-15
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Amey
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- Figure 76: Financial analysis of Amey UK, 2011-15
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Balfour Beatty
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- Balfour Beatty announces several profit warnings during 2014 and 2015 amid major challenges from construction contracts
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- Figure 77: Financial analysis of Balfour Beatty, 2011-15
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- Figure 78: Financial analysis of Balfour Beatty by segment, 2014-15
Land Lease Construction
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- Figure 79: Financial Analysis of Lend Lease Construction (EMEA), 2011-15
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The Costain Group
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- Figure 80: Financial Analysis of Costain Group, 2011-15
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- Figure 81: Turnover analysis of Costain Group, by division, 2014-15
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John Laing
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- Figure 82: Financial Analysis of John Laing, 2011-15
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Carillion
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- Figure 83: Financial Analysis of Carillion, 2011-15
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J Murphy & Sons
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- Figure 84: Financial Analysis of J Murphy & Sons, 201115
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Bam Nuttall
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- Figure 85: Financial Analysis of Bam Nuttall, 201115
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Interserve
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- Figure 86: Financial Analysis of Interserve, 2011-15
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- Figure 87: Turnover segmentation of Interserve, 2015
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Skanska UK
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- Figure 88: Financial Analysis of Skanska UK, 201115
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Mcnicholas Construction Holdings
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- Figure 89: Financial Analysis of McNicholas Construction (Holdings), 2012-16
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Galliford Try Infrastructure
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- Figure 90: Financial Analysis of Galliford Try Infrastructure, 2011-15
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Market Forecast
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- Key points
- Market overview
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- Figure 91: Forecast civil engineering construction output in Great Britain, 2017-21
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- Figure 92: Forecast civil engineering construction output in Great Britain, 2017-21
- Infrastructure investment at the heart of the government’s plans to close the UK’s productivity gap
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- Figure 93: National Infrastructure and Construction Pipeline, by sector, 2017-21
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- Figure 94: National Infrastructure and Construction Pipeline, by sector, as of Autumn 2016
- Independent Infrastructure Commission is established in 2015 to help ensure the timely delivery of major infrastructure projects
- Plans for Northern Powerhouse to provide a positive impetus for civil engineering sector in the North of England
Water & Sewerage Sector Forecast
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- Key points
- Capital expenditure
- England & Wales - AMP6 2015-20
- Move towards long-term alliances and frameworks across industry
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- Figure 95: Forecast capital expenditure for AMP6 in England & Wales, by water & sewerage company, 2015/16-2019/20
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- Figure 96: Forecast capital expenditure for AMP6 in England & Wales, by water only company, 2015/16-2019/20
- Major water & sewerage capital projects in pipeline
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- Figure 97: Water & Sewerage Infrastructure Pipeline, 201721
- Thames Tideway Tunnel
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- Figure 98: Estimated cost of Thames Tideway Tunnel, 2015/16-2021/22+
- Other capital investment plans by water and sewerage companies during AMP6 include:
- Water Industry Development
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- Figure 99: Forecast Civil Engineering Output for the Water Sector, 201721
- Sewerage Industry Development
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- Figure 100: Forecast Civil Engineering Output for the Sewerage Sector, 2017-21
Electricity Sector Forecast
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- Key points
- Electricity infrastructure projects in the National Infrastructure and Construction Pipeline
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- Figure 101: Electricity Infrastructure Pipeline, 2017-21
- Electricity Distribution Capital Expenditure
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- Figure 102: Forecast network investment of the electricity distribution network operators in Great Britain, by company, 2015/162022/23
- Drivers for Future Capital Investment in Electricity Transmission Nework
- Lack of clarity and frequent policy changes have created investment uncertainty in renewables
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- Figure 103: Renewable Energy Projects in Pipeline, by Technology, as of October 2016
- Electricity Civil Engineering Construction Forecast
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- Figure 104: Forecast Civil Engineering Output for the Electricity Sector, 2017-21
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- Figure 105: Forecast Civil Engineering Output for the Electricity Sector, 2016-20
Gas Sector Forecast
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- Key points
- Gas infrastructure projects in the National Infrastructure and Construction Pipeline
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- Figure 106: Gas Distribution and Transmission Infrastructure Pipeline, 2017-21
- UK Gas Supply
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- Figure 107: Existing UK gas import infrastructure, as of November 2016
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- Figure 108: Proposed UK import projects, as of November 2016
- Gas Distribution & Transmission Capital Expenditure
- Innovation at centre of new price control model for gas distribution and transmission network
- Transmission Network
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- Figure 109: Annual capital expenditure plans by National Grid Gas Under RIIO-T1, by Category, 2014-2021
- Distribution Network
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- Figure 110: Annual capex plans under RIIO-GD1, by GDN, 2014-2021
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- Figure 111: Annual repex plans under RIIO-GD1, by GDN, 2014-2021
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- Figure 112: Forecast total capex and repex during RIIOGD1, 2013/142020/21
- Civil Engineering Construction Output Forecast
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- Figure 113: Forecast Civil Engineering Construction Output for the Gas Sector, 201721
Airports Sector Forecast
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- Key points
- Industry Development
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- Figure 114: Forecast civil engineering output for the airport transport sector, 201721
Communications Sector Forecast
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- Key points
- NIC report criticises UK 4G mobile coverage and calls for more action on 5G
- Communications infrastructure projects in the National Infrastructure and Construction Pipeline
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- Figure 115: Communications Infrastructure Pipeline, 2017-21
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- Figure 116: Forecast Civil Engineering Output for the Communications Sector, 201721
Railways Sector Forecast
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- Key points
- Capacity constraints driving rail infrastructure investment
- Rail infrastructure projects pipeline
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- Figure 117: Rail infrastructure pipeline, 20172021
- Figure 118: Rail infrastructure projects pipeline, 2016
- Additional funding for rail infrastructure announced in 2016 autumn statement
- High Speed Two (HS2) and proposed major schemes
- Network Rail Capital Expenditure in CP5
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- Figure 119: Forecast capital expenditure for CP5, by type, 2014/15-2018/19
- Renewals expenditure in CP5
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- Figure 120: Forecast rail renewals expenditure for CP5, by activity, 2014/15-2018/19
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- Figure 121: Forecast rail renewals expenditure for CP5, 2014/15-2018/19
- Enhancements expenditure in CP5
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- Figure 122: Cost of enhancement projects during CP5
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- Figure 123: Forecast Civil Engineering Construction Output for the Rail Sector, 2017-21
Harbours Sector Forecast
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- Key points
- Growth in off-shore wind farm developments offers opportunities to UK ports
- Strategic review of east coast port facilities
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- Figure 124: Forecast civil engineering construction output for the harbours sector, 201721
Roads Sector Forecast
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- Key points
- 2014 Road Investment Strategy signals the biggest investments in roads since the 1970s
- 2015 Autumn Statement
- 2016 Autumn Statement
- Reform of Highways Agency
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- Figure 125: Forecast Civil Engineering Construction Output for the Roads Sector, 201721
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- Figure 126: Forecast Civil Engineering Construction Output for the Roads Sector, 201721
Further Sources & Contacts
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- Trade associations
- Trade magazines
- Trade exhibitions
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