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Wed June 19 2019

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Contractors warn that stalled projects are jeopardising the economy

21 May The latest survey of civil engineering contractors’ workload indicates that UK infrastructure construction has gone into reverse.

Civils contractors have seen their workloads decline more rapidly than at any point since the last recession as widespread delays to projects start to bite.

The UK government has a pipeline of more than £600bn of investment in more than 700 projects nationwide. But it is not getting on with it.

The Civil Engineering Contractors Association (CECA), whose members undertake more than 80% of infrastructure construction in the UK, has published data which shows workloads have collapsed in the last six months.

CECA’s workload trends surveys for both the fourth quarter of 2018 and the first quarter of 2019 showed that contractors’ workloads were falling, with declines in activity reported by a balance of 17% of firms in the first quarter of this year. Such a large decrease has not been seen since 2012.

Across the country projects are being delayed, from large projects including HS2, rail electrifications and motorway upgrades to smaller local regeneration schemes.

Seven out of 10 sectors reported that workloads fell compared to a year earlier, on balance. The sector that reported the weakest balance in workloads in Q1 was electricity, with 46% of firms reporting a decline. This was the lowest balance in nine years.

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Airports (-37%), local roads (-27%) and railways (-20%) remained negative in Q1. For local roads, this marked the 15th consecutive quarter of decline. Water & sewerage (-19%) and airports (-37%) also reported negative balances for a third consecutive quarter in Q1. Declining workloads were also reported for preliminary works, according to 8% of firms on balance, and for harbours & waterways (-21%). The three sectors that experienced increases in workloads in Q1 2019, on balance, were communications (54%), gas (6%) and motorways/trunk roads (2%).

CECA chief executive Alasdair Reisner said: “Right now our members should be going hammer and tongs, delivering vital upgrades to the nation’s essential networks. Industry has geared up to deliver a wave of work that has never materialised.

“Our worry is that the government’s public commitment to infrastructure is crumbling behind the scenes, with other political priorities meaning that this vital driver for growth and social wellbeing is being sidelined.

“The seemingly never-ending uncertainty regarding the UK’s future relationship with the European Union is having a clear and unambiguous effect on business confidence.

“At a time when the UK government should be ensuring the infrastructure sector is driving growth in the economy, all we are seeing is delay upon delay to schemes, and prevarication when it comes to future investment. We call on the government to take concrete steps to reverse this downward trend, by getting on with the delivery of projects that it has already publicly committed to deliver, unlocking jobs and growth across the country.”

MPU

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