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Balfour UK construction orders fall

Balfour Beatty has suffered a fall in UK construction orders over the past three months, it told the Stock Exchange this morning.

The UK’s largest contractor said in an interim management statement that the reduction in new UK work was offset by an increase in US orders.

Overall, Balfour’s order book remains in line with the £15.5 billion it reported in its half-year results on 17 August.

“In a challenging environment of government austerity and shortage of private finance, this is testament to the resilience of our business, our geographic spread, and diverse capabilities and end-markets,” it said in a statement.

The contractor said it was adjusting its UK professional services cost base to the lower level of work in this country, as well as repositioning resources to the Middle East and Australia.

Construction projects handed over in the last quarter include the Aquatics Centre for the London 2012 Olympics; the A3 Hindhead dual carriageway; and hospitals in Salford, Tameside and Fife.

The statement added: “While the UK Government’s austerity measures impact the UK construction market, we expect the power and commercial markets to pick up in the medium term to offset the shortage in public projects.

“In the meantime, we are pressing ahead with our previously announced cost reduction programme in addition to the cost base adjustments that are a normal course of our business.”

Balfour said it had a strong support services order book and was working through the mobilisation stages for a number of contract wins. These included Coventry highways term maintenance, Northamptonshire street lighting, North-west Fire and Rescue Services and Hertfordshire Schools.

The contractor said it continued to believe that the medium and long-term prospects for infrastructure markets remained positive.

“In the meantime, we are managing the business on the basis that market conditions will continue to be tough and remain confident of making progress this year.”

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