Featured Sector: Utilities

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

Government policies are providing a strong investment incentive in the energy sub-sector. Renewable energy projects have become more common, and have provided an increasing amount of work around the UK. In addition, both the water utilities and several major UK ports have moved forward with strong investment programmes. That said, capital funding will still be more scarce than the recent past following the credit crunch and the government’s austerity programme.

High levels of investment have buoyed the level of project starts and construction output in the sector. The underlying value of project starts rose consistently between 2006 and 2011, while construction output also increased.

We anticipate further investment in renewable energy. However, water firms are nearing the end of their five year investment cycle, and this could weigh on the level of work. We have tracked a drop off in the value of planned projects, and as such we don’t think 2011’s high level will be match during 2012 or 2013.