Featured Sector: Infrastructure

Infrastructure project starts saw two consecutive years of growth during 2012 and 2013, with the value of underlying project starts rising by 7% and 11% respectively. Growth has continued during 2014 with the value of underlying project starts rising by 5% during the year. This positive trend is forecast to continue through to 2016 as Network Rail rolls out its five year investment programme and additional resources are released for the national road network.

Government investment in recent years has been focused on rail related projects. 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 anticipate spending on the road network, which has been relatively neglected in recent years, to rise.

On the longer term horizon, the June Spending Round brought further commitments to infrastructure spending from the government. The news that the Department for Transport capital budget will be set at £9.5bn in 2015-16, representing a real terms increase of 5.5%, bodes well for sector prospects at the start of the next parliament.

Announcements by the government and Network Rail suggest that relatively high levels of road and rail investment will be sustained to the end of the current Parliament and beyond.