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UK Civil Engineering market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Civil Engineering market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Market segmentation

  • water
  • sewerage
  • electricity
  • gas
  • communications
  • air transport
  • rail transport
  • harbours and waterways
  • roads

Key points included

  • Market forecasts for all sectors included in segmentation
  • Market drivers for all sectors
  • Industry trends to watch

Company profiles

  • Balfour Beatty
  • The Costain Group
  • J Murphy & 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.

The major projects set to drive output over the next five years include HS2, Hinkley Point C, Thames Tideway Tunnel, major road schemes, Network Rail’s modernisation programme and projects associated with the decarbonisation of the energy system. However, shortages in skilled labour and construction materials capacity will pose challenges to the industry, with these areas requiring considerable investment. Claudia Preedy
B2B Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Civil engineering construction output up by an estimated 7% in 2018
              • Figure 1: New civil engineering construction output in Great Britain, 2014-18
            • Development of renewables generation capacity drives activity in electricity sector
              • Government commits to the biggest programme of road investments since the 1970s
                • Rail represents third largest sector for civil engineering construction activity
                  • Figure 2: Civil engineering construction output in Great Britain, by sector, 2018, (% of total)
                • UK civil engineering construction activity set for continued growth
                  • Figure 3: Forecast new civil engineering construction output in Great Britain, 2019-23
                • But concerns remain about the government’s ability to deliver major infrastructure projects
                  • Skills shortage is also posing challenges for industry
                    • Companies and brands
                      • 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
                          • Low margin bidding in the aftermath of financial crisis and project delays leads to major contractors facing financial difficulties
                            • What we think
                            • Issues and Insights

                              • Infrastructure construction pipeline is healthy, but concerns remain about the government’s ability to deliver major projects
                                • The facts
                                  • The implications
                                    • Independent Infrastructure Commission set up to help ensure the timely delivery of major infrastructure projects
                                      • The facts
                                        • The implications
                                        • The Market – What You Need to Know

                                          • Partial year data indicates a rise of 7% in civil engineering construction output in 2018
                                            • New renewables generation capacity drives activity in electricity sector
                                              • Government commits to the biggest programme of road investments since the 1970s
                                                • Rail represents third largest sector for civil engineering construction activity
                                                  • Outlook for UK civil engineering sector remains positive
                                                    • But concerns remain about the government’s ability to deliver major infrastructure projects
                                                      • Skills shortages is also posing challenges for industry
                                                      • Market Size

                                                          • Figure 4: Civil engineering construction output in Great Britain, 2014-18
                                                          • Figure 5: Civil engineering construction output in Great Britain, 2014-18
                                                          • Figure 6: Total new construction and civil engineering output in Great Britain, 2013-17
                                                      • Market Segmentation

                                                            • Figure 7: Civil engineering construction output in Great Britain, by sector, 2014-18
                                                            • Figure 8: Civil engineering construction output in Great Britain, by sector, 2014-18
                                                          • Regional civil engineering construction output
                                                            • Figure 9: Analysis of civil engineering output, by region, 2015-17
                                                        • Water & Sewerage Sector

                                                          • Water & sewerage capital expenditure
                                                              • Figure 10: UK capital expenditure on water and sewerage services, 2015/16-17/18
                                                            • English water companies plan to spend a record £50 billion+ in AMP7 (2020-25)
                                                              • Water civil engineering construction output
                                                                • Figure 11: Civil engineering construction output for the potable water industry in Great Britain, 2014-18
                                                              • Sewerage civil engineering construction output
                                                                • Figure 12: Civil engineering construction output for the sewerage industry in Great Britain, 2014-18
                                                            • Electricity Sector

                                                              • Electricity distribution capital expenditure
                                                                  • Figure 13: UK gross capital expenditure by electricity distribution network operators, 2012/13-2017/18
                                                                  • Figure 14: UK gross capital expenditure by electricity distribution network operators, 2012/13-2017/18
                                                                • Smart grid development to support low-carbon economy and aid transition to a more flexible energy system
                                                                  • Rapid increase in distributed generation
                                                                      • Figure 15: Distributed generation connected to the distribution network during DPCR5, 2012-17
                                                                      • Figure 16: Distributed generation connected to the distribution network, 2016/17, (MW)
                                                                    • Electricity transmission capital expenditure
                                                                        • Figure 17: Size of electricity transmission network in great Britain, 2018
                                                                        • Figure 18: Capital expenditure by the electricity transmission industry in Great Britain, 2013/14-2017/18
                                                                        • Figure 19: Capital expenditure by the electricity transmission industry in Great Britain, 2013/14-2017/18
                                                                      • The electricity generation mix
                                                                          • Figure 20: Analysis of electricity generation the UK, by type of fuel used, 2013-17
                                                                          • Figure 21: Proportional importance of fuel source in UK electricity generation, 2013 and 2017
                                                                        • Electricity civil engineering construction output
                                                                          • Figure 22: Civil engineering construction output for the electricity industry in Great Britain, 2014-18
                                                                          • Figure 23: Civil engineering construction output for the electricity industry in Great Britain, 2014-18
                                                                      • Gas Sector

                                                                        • Industry overview
                                                                          • Gas capital expenditure
                                                                            • Figure 24: Total gas transmission and distribution capital expenditure, 2013/14-2017/18
                                                                            • Figure 25: Total gas transmission capital expenditure, 2013/14-2017/18
                                                                            • Figure 26: Total gas distribution capital expenditure, 2013/14-2017/18
                                                                            • Figure 27: Total gas transmission and distribution capital expenditure, 2013/14-2017/18
                                                                          • Replacement expenditure dominated by iron mains replacement programmes
                                                                              • Figure 28: Length of iron gas mains replaced, by distribution network operator, 2012-17
                                                                            • Gas civil engineering construction output
                                                                              • Figure 29: Civil engineering construction output for the gas industry in Great Britain, 2014-18
                                                                          • Airports Sector

                                                                              • Figure 30: 10 largest airports in the UK, by air transport movements, 2011-16
                                                                              • Figure 31: Civil engineering construction output for the air transport industry in Great Britain, 2014-18
                                                                          • Communications Sector

                                                                            • Overview
                                                                                • Figure 32: Key market developments in the Telecoms Sector, 2012-17
                                                                              • Mobile networks
                                                                                • Broadband networks
                                                                                    • Figure 33: Civil Engineering Construction Output for the Communications Industry in Great Britain, 2014-18
                                                                                    • Figure 34: Civil engineering construction output for the communications industry in Great Britain, 2014-18
                                                                                • Railways Sector

                                                                                  • Network Rail embarks on largest rail enhancement and investment programme in CP5 2014-19
                                                                                    • Enhancements and renewals expenditure
                                                                                        • Figure 35: Analysis of enhancement expenditure in Great Britain, by type, 2015-18
                                                                                        • Figure 36: Renewal expenditure by asset, 2017 and 2018
                                                                                      • Railways civil engineering output
                                                                                        • Figure 37: Civil engineering construction output for the rail transport sector in Great Britain, 2014-18
                                                                                    • Harbours Sector

                                                                                      • Overview
                                                                                        • Recent port expansion projects
                                                                                            • Figure 38: Civil engineering construction output for the harbours and waterways sectors in Great Britain, 2014-18
                                                                                        • Roads Sector

                                                                                          • Overview
                                                                                            • Figure 39: Road network in Great Britain, by type, 2017
                                                                                            • Figure 40: Road network expenditure in England, by activity and road type, 2011/12-2015/16
                                                                                            • Figure 41: New construction and improvements of roads, motorways and all purpose trunk roads, in England, 2012/13-2016/17, (kilometres)
                                                                                          • Challenges with the Road Investment Strategy
                                                                                            • Highways England appoints 13 contractors on its £8.7 billion Regional Delivery Partnership framework
                                                                                              • Civil engineering construction output
                                                                                                • Figure 42: Civil engineering new road construction output in Great Britain, 2014-18
                                                                                                • Figure 43: Civil engineering new road construction output in Great Britain, 2014-18
                                                                                            • Market Forecast

                                                                                              • Civil engineering construction forecast
                                                                                                  • Figure 44: Forecast civil engineering construction output in Great Britain, 2019-23
                                                                                                  • Figure 45: Forecast new civil engineering construction output in Great Britain, 2019-23
                                                                                                • Infrastructure investment at the heart of the government’s plans to close the UK’s productivity gap
                                                                                                  • Infrastructure investment named as one of the five foundations of the government’s Industrial Strategy
                                                                                                    • Independent Infrastructure Commission to help ensure the timely delivery of major infrastructure projects
                                                                                                      • First National Infrastructure Assessment published in summer 2018
                                                                                                        • Government launches productivity programme for infrastructure
                                                                                                          • Government extends UK Guarantee Scheme to attract private investment in infrastructure projects
                                                                                                            • National Infrastructure & Construction Pipeline
                                                                                                                • Figure 46: National Infrastructure and Construction Pipeline, by sector, as of autumn 2018
                                                                                                                • Figure 47: National infrastructure and construction pipeline, by sector, as of autumn 2018
                                                                                                            • Water & Sewerage Sector Forecast

                                                                                                              • Move towards totex in AMP6 and beyond set to reduce bias towards capital spending
                                                                                                                • Move towards long-term alliances and frameworks across industry
                                                                                                                  • Total expenditure plans for AMP6
                                                                                                                    • Figure 48: Total expenditure (totex) allowance for AMP6 in England & Wales, by water & sewerage company, 2015/16-2019/20
                                                                                                                  • English water companies plan to spend a record £50 billion+ in AMP7 (2020-25)
                                                                                                                    • Major water and sewerage capital projects in the pipeline
                                                                                                                      • Figure 49: Water & sewerage infrastructure pipeline, as of autumn 2018
                                                                                                                    • Thames Tideway Tunnel
                                                                                                                        • Figure 50: Estimated cost of Thames Tideway Tunnel, 2016/17-2021/22+
                                                                                                                      • Forecast civil engineering construction in water sector
                                                                                                                        • Figure 51: Forecast civil engineering output for the water sector, 2019-23
                                                                                                                      • Forecast civil engineering construction in sewerage sector
                                                                                                                        • Figure 52: Forecast civil engineering output for the sewerage sector, 2019-23
                                                                                                                    • Electricity Sector Forecast

                                                                                                                      • Electricity infrastructure projects in the National Infrastructure and Construction Pipeline
                                                                                                                        • Figure 53: Electricity infrastructure pipeline, as of autumn 2018
                                                                                                                      • Renewables capacity development pipeline
                                                                                                                          • Figure 54: Renewable energy projects in pipeline, by technology, as of August 2018
                                                                                                                        • Civil engineering construction forecast in the electricity sector
                                                                                                                          • Figure 55: Forecast civil engineering output for the electricity sector, 2019-23
                                                                                                                          • Figure 56: Forecast civil engineering output for the electricity sector, 2019-23
                                                                                                                      • Gas Sector Forecast

                                                                                                                        • Gas infrastructure projects in the National Infrastructure and Construction Pipeline
                                                                                                                          • Figure 57: Gas distribution and transmission infrastructure pipeline, as of autumn 2018
                                                                                                                        • Transmission network capex forecast
                                                                                                                          • Figure 58: Annual capital expenditure plans by National Grid Gas Under RIIO-T1, by category, 2014-21
                                                                                                                        • Distribution network capex forecast
                                                                                                                          • Figure 59: Annual capex plans under RIIO-GD1, by GDN, 2014-2021
                                                                                                                          • Figure 60: Annual Repex plans under RIIO-GD1, by GDN, 2014-2021
                                                                                                                          • Figure 61: Forecast total capex and repex during RIIO-GD1, 2013/14-2020/21
                                                                                                                        • Gas network operators to face tougher price controls from 2021
                                                                                                                          • Civil engineering construction forecast in the gas sector
                                                                                                                            • Figure 62: Forecast civil engineering output for the gas sector, 2019-23
                                                                                                                        • Airport Sector Forecast

                                                                                                                            • Figure 63: Forecast civil engineering output for the airports sector, 2019-23
                                                                                                                        • Communications Sector Forecast

                                                                                                                          • Communications infrastructure projects pipeline
                                                                                                                            • Figure 64: Communications infrastructure pipeline, 2019-21
                                                                                                                          • Civil engineering construction forecast in the communications sector
                                                                                                                            • Figure 65: Forecast civil engineering output for the communications sector, 2019-23
                                                                                                                        • Railways Sector Forecast

                                                                                                                          • Network Rail set to spend £35 billion in CP6 (2019-24)
                                                                                                                            • Rail infrastructure projects pipeline
                                                                                                                                • Figure 66: Rail infrastructure projects pipeline, 2018
                                                                                                                              • Civil engineering construction forecast in the rail sector
                                                                                                                                • Figure 67: Forecast civil engineering output for the rail sector, 2019-23
                                                                                                                            • Harbours Sector Forecast

                                                                                                                                • Growth in off-shore wind farm developments offers opportunities to UK ports
                                                                                                                                  • Strategic review of east coast port facilities
                                                                                                                                    • Figure 68: Forecast civil engineering output for the harbours sector, 2019-23
                                                                                                                                • Roads Sector Forecast

                                                                                                                                  • First Road Investment Strategy, spanning April 2015 to March 2020, signals biggest investment in roads since the 1970s
                                                                                                                                    • Government confirms further increase in road investment for period 2020-25
                                                                                                                                      • Civil engineering construction forecast in the roads sector
                                                                                                                                        • Figure 69: Forecast civil engineering output for the roads sector, 2019-23
                                                                                                                                        • Figure 70: Forecast civil engineering output for the roads sector, 2019-23
                                                                                                                                    • Market Drivers – Water & Sewerage Sector

                                                                                                                                      • Future challenges facing the water and sewerage sector
                                                                                                                                          • Figure 71: UK population, by region, 2014-36
                                                                                                                                        • Industry regulation
                                                                                                                                          • Legislative environment
                                                                                                                                            • European Water Framework Directive (WFD)
                                                                                                                                              • Urban Waste Water Treatment Directive (UWWTD)
                                                                                                                                                • The Drinking Water Directive
                                                                                                                                                  • Revised Bathing Water Directive
                                                                                                                                                    • Implications of Brexit on the UK water and sewerage sector
                                                                                                                                                      • Transfer of private sewers in England and Wales
                                                                                                                                                        • The Flood and Water Management Act 2010
                                                                                                                                                        • Market Drivers – Gas & Electricity Sectors

                                                                                                                                                          • Price controls
                                                                                                                                                            • UK committed to reducing carbon emissions by 80% below 1990 levels by 2050
                                                                                                                                                              • UK currently on track to miss emission reduction targets between 2023 and 2032
                                                                                                                                                                • Policies to decarbonise electricity
                                                                                                                                                                  • Renewables Obligation
                                                                                                                                                                    • Feed-in Tariffs
                                                                                                                                                                      • Carbon Price Floor
                                                                                                                                                                        • Contracts for Difference
                                                                                                                                                                          • Capacity Market
                                                                                                                                                                          • Market Drivers – Airports Sector

                                                                                                                                                                            • Government backs construction of third runway at Heathrow Airport to meet future capacity needs in the south east
                                                                                                                                                                            • Market Drivers – Communications Sector

                                                                                                                                                                                • Government identifies roll-out of 5G and full-fibre connections as priority areas of investment
                                                                                                                                                                                • Market Drivers – Railways Sector

                                                                                                                                                                                  • Drivers of investment in rail industry
                                                                                                                                                                                    • Rail network funding and regulation
                                                                                                                                                                                      • Sir Peter Hendy’s re-plan for Network Rail’s enhancement programme 2014-19
                                                                                                                                                                                        • The Shaw report
                                                                                                                                                                                          • Network Rail launches transformation plan in 2016, implementing many of the measures set out in Shaw report
                                                                                                                                                                                            • Government publishes its strategic vision for rail
                                                                                                                                                                                              • Network Rail set to spend £35 billion in CP6 (2019-24)
                                                                                                                                                                                              • Market Drivers – Ports & Harbours Sector

                                                                                                                                                                                                • UK port demand set to increase
                                                                                                                                                                                                • 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
                                                                                                                                                                                                    • Companies and Brands – What You Need to Know

                                                                                                                                                                                                      • Low margin bidding post-financial crisis and project delays leads to major contractors facing financial difficulties
                                                                                                                                                                                                        • Balfour Beatty now focusses on specific markets with inherent growth
                                                                                                                                                                                                          • The Murphy Group aims to transform into an established tier one provider in core market sectors
                                                                                                                                                                                                            • Skanska undergoes restructuring to improve performance and focus on core business
                                                                                                                                                                                                            • Industry Structure

                                                                                                                                                                                                              • Sector remains relatively fragmented
                                                                                                                                                                                                                • 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
                                                                                                                                                                                                                    • Low margin bidding post-financial crisis and project delays leads to major contractors facing financial difficulties
                                                                                                                                                                                                                      • Industry development
                                                                                                                                                                                                                        • Figure 72: Analysis of the civil engineering industry by type of activity and company size, 2018, (Number of employees and number of companies)
                                                                                                                                                                                                                        • Figure 73: Analysis of the civil engineering industry by type of activity, number of companies and % of total, 2018
                                                                                                                                                                                                                    • Company Profiles

                                                                                                                                                                                                                      • Introduction
                                                                                                                                                                                                                        • Balfour Beatty
                                                                                                                                                                                                                          • Build to Last transformation programme launched in 2015
                                                                                                                                                                                                                              • Figure 74: Financial analysis of Balfour Beatty, 2013-17
                                                                                                                                                                                                                              • Figure 75: Turnover analysis of Balfour Beatty, by segment, 2015-17
                                                                                                                                                                                                                            • The Costain Group
                                                                                                                                                                                                                              • Group strategy
                                                                                                                                                                                                                                • Company performance and outlook
                                                                                                                                                                                                                                    • Figure 76: Financial analysis of Costain Group, 2013-17
                                                                                                                                                                                                                                    • Figure 77: Turnover analysis of Costain Group, by segment, 2015-17
                                                                                                                                                                                                                                  • J Murphy & Sons
                                                                                                                                                                                                                                    • Company strategy and outlook
                                                                                                                                                                                                                                      • Recent performance
                                                                                                                                                                                                                                        • Figure 78: Financial analysis of J Murphy & Sons, 2013-17
                                                                                                                                                                                                                                      • Bam Nuttall
                                                                                                                                                                                                                                        • Company performance and outlook
                                                                                                                                                                                                                                            • Figure 79: Financial analysis of Bam Nuttall, 2013-17
                                                                                                                                                                                                                                          • Skanska UK
                                                                                                                                                                                                                                            • Skanska’s Profit with Purpose business plan
                                                                                                                                                                                                                                              • Skanska undergoes restructuring to improve performance and focus on core business
                                                                                                                                                                                                                                                • Financial performance and outlook
                                                                                                                                                                                                                                                  • Figure 80: Financial analysis of Skanska UK, 2013-17
                                                                                                                                                                                                                                                • Galliford Try Infrastructure
                                                                                                                                                                                                                                                  • Galliford Try pulls out of bidding for large fixed-price infrastructure projects in 2017
                                                                                                                                                                                                                                                    • Financial performance and outlook
                                                                                                                                                                                                                                                      • Figure 81: Financial analysis of Galliford Try Infrastructure, 2013-17
                                                                                                                                                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                                                      • Abbreviations
                                                                                                                                                                                                                                                        • Methodology
                                                                                                                                                                                                                                                        • Further Sources and Contacts

                                                                                                                                                                                                                                                          • Trade associations
                                                                                                                                                                                                                                                            • Association of Consulting Engineers
                                                                                                                                                                                                                                                              • Civil Engineering Contractors Association
                                                                                                                                                                                                                                                                • Institution of Civil Engineers
                                                                                                                                                                                                                                                                  • Trade magazines
                                                                                                                                                                                                                                                                    • Building
                                                                                                                                                                                                                                                                      • Civil Engineering Surveyor
                                                                                                                                                                                                                                                                        • Construction News
                                                                                                                                                                                                                                                                          • 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
                                                                                                                                                                                                                                                                                              • Infrarail 2020
                                                                                                                                                                                                                                                                                                • Traffex 2019