Featured Sector: Utilities

Government policies and regulatory requirements have provided strong investment incentives over the last few years. 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.

High levels of investment have buoyed the level of sector activity: The value of underlying project starts rose consistently between 2006 to peak in 2011. Last year saw underlying starts decline as the flow of projects dipped from the 2011 peak, however the 16% decline still put starts last year at levels above any year prior to 2011. The dip in starts last year came as a result of fewer water and renewable projects starting on site and despite the decline work in both these sectors was still firm compared to pre-2011 levels.

The first six months of 2013 have been mixed, the first quarter of the year saw starts decline from 2012 levels, but the second quarter saw a strong resurgence in work as renewables projects filled the gap in the pipeline. The outlook for the remainder of the year looks set to continue along the same path as the first six months, with an overall gain in starts for the year.

We expect the positive performance to continue into 2014 and are forecasting some marginal gains for this year, with energy related projects continue to drive the gains.