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Civils work enters positive territory

The number of infrastructure contractors reporting increased workloads finally entered positive territory at the end of 2011 after more than three years of pain.

But the good news came with a warning that any signs of growth would be “extinguished” unless the government delivers on the investment commitments set out in its National Infrastructure Plan 2011.

The Civil Engineering Contractors Association published its workload trends survey for the last quarter of 2011 today, taking responses from 106 contractors.

The number of respondents on balance reporting increased workloads compared with a decrease one year ago hit a positive 5 per cent, compared with a negative 22 per cent in the previous quarter, taking the overall figure out of the red for the first time since 2008.

Click on graph to enlarge

Infrastructure workload trends Feb 12

CECA said this could be partially explained by the very mild weather and was mostly thanks to increased workloads in the rail and water and sewerage sectors. Railway workload continues to increase year on year, according to 41 per cent of firms, up 60 per cent on Q3 2011.

Expected workloads for the next 12 months reached 7 per cent, compared with -23 per cent in the previous quarter and a low of -77 per cent in Q3 2010.

While welcoming the findings, CECA director of external affairs Alasdair Reisner warned: “Most of the growth indicated comes from regulated sectors that are currently at or near the peak of their spending cycles.

“Our concern is that, as spending in these areas falls away over the coming months, there may not be sufficient activity elsewhere to sustain workloads.

“For this reason it is essential that the government holds firm on its commitments to infrastructure made in the autumn statement.
“By doing so it will help secure vital contributions to growth, while supporting the future of the UK’s infrastructure supply chain.”

Overall, workloads in England and Scotland were more positive, but Wales saw falling workloads, with prospects remaining bleak.

Analysis shows that companies with more than 600 employees reaped the benefits, while smaller firms were in negative territory.

Public sector cuts meant work on local roads was down on the previous quarter, while major roads were still in heavy decline, with expectations in highways deteriorating further.

The survey also found that 10 per cent of firms reported a rise in order books from a year ago, but Scottish and Welsh order books were both heavily down.

Tender prices remained negative, but with an improved balance on previous months.


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