Featured Sector: Infrastructure

Underlying value of construction projects starting on site. (Excludes individual projects of more than £100 million and framework agreements).

Infrastructure, more than other sectors, relies on major project spending. Therefore, the commitment to fund a series of major projects during October’s Spending Review came as welcome news. Within the sector, only transport suffered a slight cut to its capital funding budget. After a weak first half of 2009, the underlying flow of project starts rebounded during the second half of the year, with the value of underlying project starts rising 13% during the year as a whole.

The performance of the infrastructure sector during 2010 varied significantly across its different work categories and regions, a divergence that continued during 2011. For instance, improvements to London’s transport infrastructure ahead of the 2012 Olympics will help stimulate activity over the next year.  Overall, we forecast decent growth in underlying project starts over 2012.