UK construction boosted by surge of big projects(VIDEO)
The new £4.3bn super-sewer will run for 16 miles under the Thames
Gill Plimmer
UK construction is expected to return to pre-recession levels for the first time this year because of a surge in road, rail and energy projects.
Construction work is expected to rise 3.6 per cent in 2016 and 4.1 per cent in 2017, the Construction Products Association said. This will generate more than £10.4bn for the building industry, which accounts for 6.3 per cent of GDP.
Noble Francis, economics director of the CPA, said that despite poor weather that slowed growth in January, the industry is “positive about the next 12-18 months because the fundamentals in the sector are still good.
“It’s been a tough decade for the industry due to the prolonged impacts of the financial crisis so the growth is a welcome relief,” he added.
In the past three years, an increase in housebuilding has driven growth in the sector. But for the first time in five years, infrastructure projects will be the biggest contributor, with work forecast to rise by 56.9 per cent between now and 2019.
Major rail projects include the £563m upgrade of Bank station in central London and the electrification of cross-country rail routes including the Great Western Railway and the north west network.
Work on the HS2 high-speed railway line, is also included in the forecasts as is the new £4.3bn super-sewer that will run for 16 miles under the Thames river in London.
Despite the large number of infrastructure projects due to begin, the CPA warned many risked being delayed.
The electrification of the Midland Mainline and Transpennine routes has already been postponed until 2019.
Meanwhile, the planned new nuclear power station at Hinkley Point C, which is due to supply 7 per cent of Britain’s energy when it is completed in 2025, may also stall after EDF, the French electricity company that is financing the project, once again delayed a final investment decision.
Road construction, which was cut sharply in 2011, is also expected to benefit from the government’s £15.2bn Roads Investment Strategy run by Highways England. But there are concerns that work may need to be refocused on a small number of projects because some are running behind schedule and over budget.
The start of work on projects that have sometimes been years in the planning comes as a boost to the sector, which has been vulnerable to stop-start spending decisions since 2010.
The government’s National Infrastructure Plan, announced in 2011, listed 500 building projects and aimed to drag the country out of recession.
But the Treasury’s goal of raising £20bn from pension funds to invest in infrastructure was not achieved; by July 2015, only £1bn had been raised and much of it had been invested in low-risk second-hand private finance initiative projects to fund schools and hospitals. Overall, infrastructure spending fell 8 per cent between 2010 and 2014.
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