NuGen Properties

Transport collapses but energy and utilities keep civils contractors busy

Work on the Hinkley Point C nuclear power station helps to keep civil engineering contractors busy

Of the 89 members of the Civil Engineering Contractors Association (CECA) that responded, 46% said that their workload had increased over the past year, while only 15% said that things had slowed down. The improvement was more marked in Scotland and Wales than in England.

(Survey responses are weighted by size of firm to make the results representative of the industry.)

The second quarter of 2023 was the 11th successive quarter – ever since coming out of the first covid lockdown – that CECA members had seen growth (i.e. more firms expanding than contracting).

However, workload growth today is concentrated in four sectors: nuclear, renewables, water & sewerage and (to a lesser degree) harbours & waterways. It fell in seven other sectors, including motorways/trunk roads, preliminary works and railways. Workloads in motorways and trunk roads have now fallen for four consecutive quarters, CEC reports.

Order books are also on the rise. A net balance of 39% of reported an increase in orders, compared to 24% in Q1. Overall, 54% of firms reported that orders had risen and 15% reported that they had fallen. Order book growth was slower in Wales than in England and Scotland.

There is also a strong degree of optimism in the sector. A net balance of 46% firms expect their workloads to increase in the next 12 months, up from 30% in Q1.

Despite this growth in workload, orders and optimism, CECA chief executive Alasdair Reisner focused on the difficulties facing the sector. “Sadly the current UK government’s approach to infrastructure is typified in its recent decision to postpone the full delivery of HS2 to meet its arbitrary fiscal rules, rather than backing that project to meet its full potential in creating much-needed jobs and growth,” he said.

“It is concerning that this approach – which prioritises short-term cost-cutting at the expense of future transformational economic activity – seems to be prevalent in Whitehall’s attitude towards all sectors of construction and infrastructure.

“It is not an understatement to say that our sector held the economy together during and after the covid-19 pandemic, arguably the greatest peacetime crisis faced by any UK government. And yet now that the economy is continuing to languish amidst weak growth, the UK Government is failing to back the infrastructure sector to turn this situation around.

“We call on the UK government to work with industry to identify a clear plan to unblock growth in all sectors of UK infrastructure, rather than give in to the dither and delay that is currently holding UK plc back. We owe it to the businesses and communities we work in to make sure that UK construction and infrastructure can rise to the challenge of creating the prosperous post-covid economy that we all want to see, rather than becoming the sick man of Europe once again.”

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