Light at the end of the tunnel if government supports UK infrastructure, says CECA

Despite challenging market conditions, a new report shows that civil engineering contractors are expecting orders to turn into activity, with a leading representative body urging the government to support planned projects to secure economic growth.

Results published by the Civil Engineering Contractors Association (CECA)’s Workload Trends Survey for 2018 Q1 found that workloads had declined for the second consecutive quarter in Great Britain, according to 1% of firms, on balance. 

Overall, 28% of the respondents reported that workloads had fallen compared to a year ago, and 44% of the respondents reported that workloads were unchanged. For England, only 9% of firms, on balance, reported an increase in workloads in Q1, down from 21% in Q4.

However, order books increased for 24% of British firms on balance, and one-third of UK contractors have inspired some optimism as they expect their workloads to increase in the coming year.

In England, 55% of firms reported that orders had increased and 28% reported that they were unchanged. The net balance of 38% of firms reporting an increase in orders, up from 13% in the previous quarter, was the highest since 2015 Q1. Welsh contractors reported a negative balance of -6% for orders in Q4 2017 but the start of 2018 saw a turnaround, with a balance of 46% of firms seeing orders increase.

The picture is much bleaker north of the border with the survey showing workloads in Scotland declined again over the last quarter. During Q1, 38% of Scottish firms, on balance, reported a decrease in workloads on a year ago, the weakest in nearly eight years. For a second consecutive quarter, orders declined in Q1, although 3% of Scottish firms expect workloads to increase over the next year, up from -4% in Q4.

Commenting on the survey, CECA chief executive Alasdair Reisner, said: “2018 has seen challenging market conditions in the UK’s infrastructure sector, where the aftershocks of the Carillion liquidation continue to be felt. We believe there is more the government can do to support the sector, by committing to projects outlined in the National Infrastructure Delivery Plan and continuing to develop this pipeline to secure economic growth.

"At the same time, our members are reporting that they are expecting orders to turn into activity, as schemes come forward to market in the coming year. While the first quarter of 2018 has proved a challenging period for many of our members, we believe that there is light at the end of the tunnel, and that industry will act as a platform for secure growth in the coming years.”

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