The Future of the CECA Rail Forum

Infrastructure – the state of the market

Alasdair ReisnerDirector of external affairsCECA

Alasdair Reisner CECA National

Introducing CECA

The Civil Engineering Contractors Association (CECA) is the trade body for companies delivering c£25 billion of maintenance and improvements to the UK’s vital utility and transport networks each year

Eight regions covering England, Wales and Scotland.

Policy groups covering major sectors including roads, rail, water and energy

Campaign to promote the benefits of infrastructure investment in the UK

Alasdair Reisner CECA National

Infrastructure – the state of the market

What does the infrastructure sector look like?

What is happening in the sectors?

Roads

Rail

Water

Electricity

What does the future look like?

Alasdair Reisner CECA National

Infrastructure sector overview

Industry broadly splits into five main areas.

Alasdair Reisner CECA National

Historical infrastructure output

Infrastructure did not experience same consistent boom as the rest of the construction sector in the decade prior to the global financial crisisActivity started to pick up from 2007 onwards. No single cause of increaseWorkloads collapsed in early 2012Potential recovery on the cards?

Source - ONS new construction output by sector (constant 2005)

Alasdair Reisner CECA National

Roads

2008-2011 saw significant ramp up under ‘fiscal stimulus’ programme

Cliff-edge collapse with peak to trough change of 52 per cent

Estimated jobs loss of c10,000

Hopes pinned to restructure of the ownership and management of the strategic roads network

Alasdair Reisner CECA National

RailMajor investment post-Hatfield

Activity falls back in CP3 (2004-2009)

Major increase from 2008 onwards

Now the single biggest sector within Infrastructure

Forecasts suggest continuing high output levels in future years

Alasdair Reisner CECA National

WaterMajor increase in activity in period from 2009 onwards, driven by rising water activity

Concerns regarding cyclicality in sector, associated with five year regulatory periods

Current efforts to drive greater efficiency by reducing cyclical impacts across the sector

Awaiting details of next period consultation

Alasdair Reisner CECA National

Electricity

Figures include output relating to new generation, transmission and distribution projects

Major increases in output at start of last two distribution price control periods

Expect major upswing in activity to address concerns about meeting future demand as existing capacity nears end of life

Alasdair Reisner CECA National

What does the future look like?

CECA Workload Trends survey of future orders

Positive results indicate growth in orders on same period 12 months ago

Regulated sectors showing positive figures

Roads and preliminary works getting worse, but at a slower rate

Rail

Roads

Electricity

Water

Preliminary works

Alasdair Reisner CECA National

Best case scenario?Immediate action to

stimulate maintenance and minor works

Clear policy framework releases significant investment in energy

Roads Reform process reinvigorates highways investment

Sustained growth in rail accompanied by go-ahead for HS2

Prolonged drought in activity

Continuing uncertainty about energy strategy delays projects

Political pressure limits roads investment

Economic challenges restrict confidence of private sector to invest in development

Worst case scenario?

Alasdair Reisner CECA National

Thank you