UK Civil Engineering Market Report 2020
£ 1,495 (Excl.Tax)
Report Summary
Providing the most comprehensive and up-to-date information and analysis of the UK Civil Engineering market, including the behaviours, preferences and habits of the consumer.
The UK Civil Engineering sector saw major disruption across 2020, with the COVID-19 pandemic lockdowns shutting down projects across the market. There was a 6% decline in construction output, with the majority of building sites closing in the March 2020 lockdown and with heavy restrictions throughout the next year. While most contractors were able to operate normally in the second and third national lockdowns, disruptions to supply chains still caused issues.
With continued government commitment towards Net Zero Carbon by 2050, the Civil Engineering sector should see sustained growth in the next few years. However, the setbacks of 2020 may see the revising and deferral of many upcoming construction projects. Network Rail has already reported financial underperformance throughout 2020, which could curtail their spending going forwards.
This report covers the current state of the UK Civil Engineering sector, as the predictions coming out of the pandemic. While disruptions have occurred throughout the country, major projects going ahead in the next five years will help to boost recovery.
Read on to discover more details or take a look at all of our UK Automotive market research.
Quickly understand
- The impact of COVID-19 on the civil engineering construction sector.
- The impact of government policy and regulatory changes on the market.
- Key drivers for growth across the civil engineering construction market.
- The performance of key industry players.
- Five-year market outlook.
Covered in this report
Sectors: Water, sewerage, electricity, gas, communications, air, railways, harbours, roads, public work, private work.
Brands: Balfour Beatty, Costain Group, J Murphey & Sons, Bam Nuttall, Skanska UK, Galliford Try Infrastructure.
Expert analysis from a specialist in the field
Written by Claudia Preedy, a leading analyst in the B2B sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
Infrastructure investment will have a key role to play in the economic recovery from COVID-19, both by maintaining jobs in the short term, and creating the conditions for long-term sustainable growth. The government has recently brought forward capital investment in infrastructure, decarbonisation and maintenance projects and committed £27 billion to economic infrastructure investment in 2021/22 to support the recovery. The recently published national infrastructure strategy also provides the civil engineering sector with much needed clarity on the direction of investment and the long-term visibility it needs to properly deliver a recovery from COVID-19.the government’s commitment to infrastructure spending as part of the economic recovery, the “levelling-up” agenda and the need to progress towards net zero carbon by 2050 should ensure sustained growth in the civil engineering sector over the coming years.
Claudia Preedy
B2B Senior Analyst
Table of Contents
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Overview
- Key issues covered in this report
- COVID-19: Market context
- Impact of the January 2021 lockdown and the vaccination rollout
- Economic and other assumptions
- Categories covered in this Report
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Executive Summary
- Impact of COVID-19 on civil engineering construction
- Figure 1: Short-, medium- and long-term impact of COVID-19 on civil engineering, 20 January 2021
- The market
- Civil engineering construction activity down by 6% in 2020, largely due to disruption caused by COVID-19
- Figure 2: New civil engineering construction output in Great Britain, 2016-20
- Rail transport accounts for a third of civil engineering construction activity in 2020
- Electricity sector represents second largest sector for civil engineering construction output
- Civil engineering construction output in the roads sector down by an estimated 5% in 2020
- Figure 3: Civil engineering construction output in Great Britain, by sector, 2020, (% of total)
- UK civil engineering sector set for good recovery
- Figure 4: Forecast new civil engineering construction output in Great Britain, 2021-25
- Companies and brands
- Major civil engineering contractors report losses due to COVID-19 impact
- Trend towards long-term partnerships and alliances, especially in utilities sector
- Impact of COVID-19 on civil engineering construction
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Issues and Insights
- Major civil engineering contractors take financial hit from COVID-19 but remain upbeat about prospects
- Long-awaited National Infrastructure Strategy provides much needed clarity for civil engineering sector
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The Market – Key Takeaways
- Investment in transport infrastructure drives recent growth in civil engineering construction output, but COVID-19 causes disruption
- Long-awaited National Infrastructure Strategy provides much needed clarity for civil engineering sector
- UK civil engineering sector set for good recovery
- Skills shortages likely to remain an issue
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Market Size and Segmentation
- Short-, medium- and long-term impact of COVID-19 on the civil engineering sector
- Figure 5: Short-, medium- and long-term impact of COVID-19 on civil engineering, 20 January 2021
- Lockdown
- Re-emergence
- Recovery
- Market overview
- Figure 6: Civil engineering construction output in Great Britain, 2016-20
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- Figure 7: Civil engineering construction output in Great Britain, 2016-20
- Figure 8: Total new construction and civil engineering output in Great Britain, 2016-20
- Market segmentation
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- Figure 9: Civil engineering construction output in Great Britain, by sector, 2016-20
- Figure 10: Civil engineering construction output in Great Britain, by sector, 2016-20
- Regional civil engineering construction output
- Figure 11: Analysis of civil engineering output, by region, 2017-19
- Short-, medium- and long-term impact of COVID-19 on the civil engineering sector
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Water & Sewerage Sector
- Water & sewerage capital expenditure
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- Figure 12: UK capital expenditure on water and sewerage services, 2015/16-2019/20
- Move towards totex in AMP6 and beyond set to reduce bias towards capital spending
- Move towards long-term alliances and frameworks across industry
- Water civil engineering construction output
- Figure 13: Civil engineering construction output for the potable water industry in Great Britain, 2016-20
- Sewerage civil engineering construction output
- Figure 14: Civil engineering construction output for the sewerage industry in Great Britain, 2016-20
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Electricity Sector
- Electricity distribution capital expenditure
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- Figure 15: UK gross capital expenditure by electricity distribution network operators, 2015/16-2019/20
- Figure 16: UK gross capital expenditure by electricity distribution network operators, 2014/15-2019/20
- Smart grid development to support low-carbon economy and aid transition to a more flexible energy system
- Rise in distributed generation
- Growth in decentralised and renewable electricity generation will increase the complexity of operating a secure and cost-effective energy system
- Electricity transmission capital expenditure
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- Figure 17: Size of electricity transmission network in Great Britain, 2020
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- Figure 18: Capital expenditure by the electricity transmission industry in Great Britain, 2015/16-2019/20
- Figure 19: Capital expenditure by the electricity transmission industry in Great Britain, 2015/16-2019/20
- The electricity generation mix
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- Figure 20: Analysis of electricity generation in the UK, by type of fuel used, 2015-19
- Figure 21: Proportional importance of fuel source in UK electricity generation, 2015 and 2019
- Electricity civil engineering construction output
- Figure 22: Civil engineering construction output for the electricity industry in Great Britain, 2016-20
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- Figure 23: Civil engineering construction output for the electricity industry in Great Britain, 2016-20
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Gas Sector
- Industry Overview
- Gas capital expenditure
- Figure 24: Total gas transmission and distribution capital expenditure, 2015/16-2019/20
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- Figure 25: Total gas transmission capital expenditure, 2015/16-2019/20
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- Figure 26: Total gas distribution capital expenditure, 2015/16-2019/20
- Figure 27: Total gas transmission and distribution capital expenditure, 2015/16-2019/20
- Replacement expenditure dominated by Iron Mains Replacement Programme
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- Figure 28: Length of iron gas mains replaced, by distribution network operator, 2014-19
- Gas civil engineering construction output
- Figure 29: Civil engineering construction output for the gas industry in Great Britain, 2016-20
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Airports Sector
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- Figure 30: 10 largest airports in the UK, by air transport movements, 2015-19
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- Figure 31: Civil engineering construction output for the air transport industry in Great Britain, 2016-20
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Communications Sector
- Overview
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- Figure 32: Key market developments in the telecoms sector, 2014-19, (millions)
- Mobile networks
- Broadband networks
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- Figure 33: Civil engineering construction output for the communications industry in Great Britain, 2016-20
- Figure 34: Civil engineering construction output for the communications industry in Great Britain, 2016-20
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Railways Sector
- Network Rail’s major rail modernisation programme
- Network Rail’s enhancements budget for CP6 (2019-24) cut by £1 billion
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- Figure 35: Renewal expenditure by asset, 2018-20
- Railways civil engineering output
- Figure 36: Civil engineering construction output for the rail transport sector in Great Britain, 2016-20
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Harbours Sector
- Overview
- Recent port expansion projects
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- Figure 37: Civil engineering construction output for the harbours and waterways sectors in Great Britain, 2016-20
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Roads Sector
- Overview
- Figure 38: Road network in Great Britain, by type, 2019
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- Figure 39: New construction and improvements of roads, motorways and all purpose trunk roads, in England, 2014/15-2018/19, (kilometres)
- Road Investment Strategy
- Civil engineering construction output
- Figure 40: Civil engineering new road construction output in Great Britain, 2016-20
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- Figure 41: Civil engineering new road construction output in Great Britain, 2016-20
- Overview
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Market Forecast
- Market drivers and assumptions
- Figure 42: Key drivers affecting Mintel’s market forecast, 2015-2025 (prepared on 19 January 2021)
- Long-awaited National Infrastructure Strategy provides much needed clarity for civil engineering sector
- New National Infrastructure Bank to be in place by Spring 2021
- National Infrastructure and Construction Pipeline
- Figure 43: National Infrastructure and Construction Procurement Pipeline, by sector, as of Summer 2020
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- Figure 44: Estimated maximum contract value of procurements in the pipeline, by sector, as of Summer 2020 (£ million)
- Civil engineering construction forecast
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- Figure 45: Forecast civil engineering construction output in Great Britain, 2020-24
- Figure 46: Forecast new civil engineering construction output in Great Britain, 2021-25
- Market drivers and assumptions
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Water & Sewerage Sector Forecast
- Water companies to spend a record £51 billion in AMP7 (2020-25)
- Government calls on water companies to accelerate investment as part of the country’s green economic recovery from COVID-19
- Forecast civil engineering construction in the water sector
- Figure 47: Forecast civil engineering output for the water sector, 2021-25
- Forecast civil engineering construction in sewerage sector
- Figure 48: Forecast civil engineering output for the sewerage sector, 2021-25
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Electricity Sector Forecast
- Renewables capacity development pipeline
- Figure 49: Renewable energy projects in pipeline, by technology, as of June 2020
- Civil engineering construction forecast in the electricity sector
- Figure 50: Forecast civil engineering output for the electricity sector, 2021-25
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- Figure 51: Forecast civil engineering output for the electricity sector, 2021-25
- Renewables capacity development pipeline
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Gas Sector Forecast
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- Figure 52: Forecast civil engineering output for the gas sector, 2021-25
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Airport Sector Forecast
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- Figure 53: Forecast civil engineering output for the airports sector, 2021-25
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Communications Sector Forecast
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- Figure 54: Forecast civil engineering output for the communications sector, 2021-25
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Railways Sector Forecast
- National Rail’s enhancements budget for CP6 cut by £1 billion
- HS2 set to dominate rail infrastructure spending
- Northern Powerhouse Rail
- Civil engineering construction forecast in the rail sector
- Figure 55: Forecast civil engineering output for the rail sector, 2021-25
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Harbours Sector Forecast
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- Figure 56: Forecast civil engineering output for the harbours sector, 2021-25
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Roads Sector Forecast
- Government confirms further increase in road investment for period 2020-25
- Highways England adopts new delivery models
- New routes to market
- The Regional Delivery Partnership Framework
- The Smart Motorways Alliance
- Civil engineering construction forecast in the roads sector
- Figure 57: Forecast civil engineering output for the roads sector, 2021-25
- Figure 58: Forecast civil engineering output for the roads sector, 2021-25
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Market Drivers – Water & Sewerage Sector
- Future challenges facing the water and sewerage sector
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- Figure 59: Population projections for England, by region, 2016-36
- Industry regulation
- Legislative environment
- Implications of Brexit on the UK water and sewerage sector
- Environment Bill
- Water infrastructure and flood resilience play key roles in government’s National Infrastructure Strategy
- Thames Tideway Tunnel
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- Figure 60: Estimated cost of Thames Tideway Tunnel, 2016/17-2021/22+
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Market Drivers – Gas & Electricity Sectors
- Price Controls
- The Climate Change Act 2008
- UK commits to 2050 net-zero target
- UK makes good progress in reducing CO2 emissions to date, but steeper reduction required to progress towards net zero
- Government sets out commitments to ensure offshore wind will power every home by 2030
- Government outlines shift to clean energy in long-awaited Energy White Paper
- Support mechanisms and policies to decarbonise electricity
- Renewables Obligation
- Feed-in Tariffs
- Carbon Price Floor
- Contracts for Difference
- Capacity Market
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Market Drivers – Airports Sector
- Third runway at Heathrow Airport gets go-ahead but obstacles remain
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Market Drivers – Communications Sector
- Government committed to roll-out of full fibre and 5G networks
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Market Drivers – Railways Sector
- Drivers of investment in rail industry
- Impact of COVID-19
- Rail network funding and regulation
- Government’s strategic vision for rail
- Williams Review of the rail industry
- Network Rail intends to spend £42 billion on rail improvements in CP6 (2019-24)
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Market Drivers – Ports & Harbours Sector
- UK port demand set to increase
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Market Drivers – Roads Sector
- Government commits to biggest programme of road investment since the 1970s
- Government confirms further increase in road investment for period 2020-25
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Companies and Brands – Key Takeaways
- Financial impact of COVID-19 on civil engineering contractors
- Trend towards long-term partnerships and alliances, especially in utilities sector
- Civil engineering companies are required to develop a wider set of skills and competencies
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Industry Structure
- Trend towards long-term partnerships and alliances, especially in utilities sector
- Civil engineering companies are required to develop a wider set of skills and competencies
- Major civils contractors launch transformation programmes as low-margin bidding and project delays lead to financial difficulties
- Financial impact of COVID-19 on civil engineering contractors
- Industry development
- Figure 61: Analysis of the civil engineering industry by type of activity and company size, 2020, (number of employees and number of companies)
- Figure 62: Analysis of the civil engineering industry by type of activity, number of companies and % of total, 2020
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Company Profiles
- Introduction
- Balfour Beatty
- Balfour Beatty has simplified and refocused operations through its Build to Last programme
- Impact of COVID-19
- Balfour Beatty order book boosted by HS2 contract
- Financial performance
- Figure 63: Financial analysis of Balfour Beatty, 2015-19, (£ million)
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- Figure 64: Turnover analysis of Balfour Beatty, by segment, 2017-19
- Costain Group
- “Leading Edge” strategy
- Financial performance and outlook
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- Figure 65: Financial analysis of Costain Group, 2015-19
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- Figure 66: Turnover analysis of Costain Group, by segment, 2018-19
- J Murphy & Sons
- Group strategy
- Financial performance
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- Figure 67: Financial analysis of J Murphy & Sons, 2015-19
- Bam Nuttall
- Company performance and outlook
- Figure 68: Financial analysis of Bam Nuttall, 2015-19
- Skanska UK
- Skanska’s Profit with Purpose business plan
- Skanska undergoes restructuring to improve performance and focus on core business
- Skanska agrees sale of its infrastructure services arm
- Financial performance and outlook
- Figure 69: Financial analysis of Skanska UK, 2015-19
- Galliford Try Infrastructure
- Corporate restructuring sees company focus on water and highways sectors
- Strategy
- Impact of COVID-19 and outlook
- Financial performance
- Figure 70: Financial analysis of Galliford Try Infrastructure, 2015-19
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Appendix – Data Sources, Abbreviations and Supporting Information
- Abbreviations
- Methodology
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Further Sources and Contacts
- Trade associations
- Association of Consulting Engineers
- Civil Engineering Contractors Association
- Institution of Civil Engineers
- Trade magazines
- Building
- Civil Engineering Surveyor
- EMAP Publishing Ltd
- International Railway Journal
- Modern Railways
- New Civil Engineer
- Plant & Civil Engineer
- Railway Gazette International
- Rail Professional
- Water & Sewerage Journal
- Utility Week
- Trade events
- Railtex/Infrarail 2021
- Traffex 2021
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