Featured Sector: Infrastructure

 Infrastructure Construction (£ million)

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 from the government. Therefore, the commitment to fund a series of major projects from the coalition government was a welcome one. The department for transport suffered a slight cut to its capital funding budget. Though the underlying value of project starts has declined for the past two years, there have been a good few major projects which are excluded from the index which have supported output, particularly in London and the South East of England.

Investment has focussed on rail related investment, the reasons for which were part necessity, part economic stimulus and part Olympic preparations. We expect there to continue to be a high value of rail investment, with several major projects slated to start over the next few years. However, we also now expect spending on the road network, which has been neglected in recent years (at least in comparison to the railways).

After seeing an increase in planned projects, we expect a 10% growth in the underlying value of project starts this year.