2013-12-23 17:29:05 - Recently published research from Business Monitor International, "United Kingdom Infrastructure Report Q1 2014", is now available at Fast Market Research
This quarter we have once again revised our construction industry growth forecast upwards in light of growing activity and confidence in the residential sector and a number of mega-projects that are in motion. The government's 'Help to Buy' scheme is pushing developers to start building, although we caution the longevity of the boost to growth. The UK's largest planned project, the Hinkley Point C nuclear reactor, is now set to enter construction in 2014 after EDF and the government agreed a strike price. Our view that the railways sector will outperform in transport infrastructure gained more support after Network Rail's CP5 investment plan was approved by regulators. In light of these factors, we now see the construction industry value posting
real growth of 1.5% year-on-year in 2013 and 2.3% in 2014.
Full Report Details at
- www.fastmr.com/prod/754527_united_kingdom_infrastructure_report_ ..
Whilst we have revised our forecasts this quarter, we remain cautious in our optimism. Indeed, after a prolonged contraction since 2007, the UK's construction sector will need sustained growth over the coming years to return to its pre-crisis levels of output. Certainly, talk of a boom in the sector is misguided, with much of the UK still struggling in comparison to London. In 2012 construction activity was 14% lower than the pre-recession peak and deteriorated even further in the first quarter of 2013.
Major developments in the sector:
* With demand for housing and new build reservations being up as a consequence of the scheme, developers, who had previously been holding off on construction until more favourable economic conditions were prevailing, are increasingly being encouraged to start building. In the third quarter of this year, a net balance of 41% of surveyors reported a rise in privately-funded housing projects, according to the Royal Institution of Chartered Surveyors.
* Our view that UK airports will be some of the most sought-after assets and attract significant investment has also been supported this quarter, with Global Infrastructure Partners (GIP) looking to invest GBP200mn to expand capacity.
* Providing a boost to our long-term energy and utility forecasts, the Hinkley Point nuclear reactor has finally moved forward after EDF and the government agreed to the price of electricity the plant will produce. The joint venture of Bouygues Travaux Publics and Laing O'Rourke (BYLOR) will build the new infrastructure, after being selected last year for the main civil engineering and construction contract valued at more than GBP2bn. The total construction cost of the two nuclear power units at Hinkley Point, expressed in 2012 money, is expected to be GBP14bn.
* Network Rail's GBP37.5bn CP5 plan was subject to approval by the Office of Rail Regulation (ORR), which has now set out the final draft of its proposals for rail funding and performance over the next five years. Cost reductions were expected and the ORR suggested cost cutting measures to the CP5 are to see GBP1.7bn shaved off the budget, although GBP2bn was the initial estimate. Network Rail have until February 7, 2014, to either accept or reject the ORR's proposals, but we believe that the majority of the CP5 GBP4bn allocation to be spent annually on upgrading railway infrastructure should escape cost cutting.
Report Table of Contents:
BMI Industry View
- Construction and Infrastructure Forecast Scenario
- Table: UK Construction And Infrastructure Industry Data, 2011-2016
- Table: UK Construction And Infrastructure Industry Data, 2017-2022
- Transport Infrastructure - Outlook and Overview
- Table: UK Transport Infrastructure Industry Data, 2011-2016
- Table: UK Transport Infrastructure Industry Data, 2016-2022
- Major Projects Table - Transport
- Table: Major Projects - Transport
- Energy and Utilities Infrastructure - Outlook and Overview
- Table: UK Energy And Utilities Infrastructure Industry Value, 2011-2016
- Table: UK Energy And Utilities Infrastructure Industry Data, 2017-2022
- Major Projects Table - Energy & Utilities
- Table: Major Projects - Energy & Utilities
- Residential/Non-Residential Construction - Outlook and Overview
- Table: UK Residential And Non-Residential Building Industry Data, 2011-2016
- Table: UK Residential And Non-Residential Building Industry Data, 2017-2022
- Capital Flourishing
- Major Projects Table - Residential/Non-Residential Construction And Social Infrastructure
- Table: Major Projects - Residential/Non-Residential Construction And Social Infrastructure
Industry Risk Reward Ratings
- United Kingdom - Risk/Reward Ratings
- Western Europe And North America Infrastructure Risk/Reward Ratings
- Table: Developed States Infrastructure Risk/Reward Ratings
- Competitive Landscape
- Table: EQS
- Carillion Plc
- Balfour Beatty
Global Infrastructure Overview
- Global Industry Overview
- Table: Latin America PPP Round-Up
- Industry Forecast Methodology
- Sector-Specific Methodology
- Risk/Reward Rating Methodology
- Sector-Specific Methodology
- Table: Infrastructure Risk/Reward Rating Indicators
- Table: Weighting Of Indicators
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