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Boom times are coming. . .

Industry outlook, Bidding - Recent major contract awards and healthy infrastructure point to a boom year in 2007.

Whisper it softly and keep everything crossed but according to engineers the construction industry is in a healthier position than it has been at any time over the last 30 years (see news story page 8).

Senior industry figures speaking to NCE this week share a growing sense of optimism for the coming year.

They say a stable economy and a surge in public and private infrastructure work coming through in the next two years will generate record order books for contractors.

Dean & Dyball chairman Martin Hirst says that the market is the best he has known it in 35 years.

'Certainly looking back I think it's as steady and stable as I have ever known it, ' he says.

'There is a good range of opportunities and it's a very sensible market place.' Soon to be released industry surveys on how the construction industry has performed in the third quarter of 2006 are expected to confirm strong overall performance for the second quarter in a row and growing optimism for the coming year.

Civil Engineering Contractors Association (CECA) economic advisor Jim Turner says that every respondent to its forthcoming survey expressed great optimism for the coming year.

'In terms of workload and order books, expectation for the coming year remains strong pretty much across the board.

No one is reporting a weaker order book or drops in staffing levels.' Experts point to huge amounts of work coming on stream in the road and rail infrastructure sectors as well as work peaking on the next round of five year investment plans in water and sewerage infrastructure.

Works from public health and education investment will remain very strong despite pressure on budgets and private sector urban regeneration. The boom in office developments is expected to continue across the UK.

Other sectors expected to boom are nuclear, ports and harbours and electricity.

Contractors also point to the benefi s that have accrued over the years of low inflation and low interest rates.

'Because interest rates have remained stable for so long, clients have greater certainty of achieving investment returns, ' says Costain group business development director Stephen Wells.

While new surveys will point to optimism across the board, Turner says the latest CECA survey will show that current performance and levels of optimism are notably higher among the 30 or so big contractors with 600 or more staff.

Optimism will continue to go 'strongly upwards' for the bigger contractors, most of which reported very healthy increases in turnover and orders in NCE's recent Contractors File. The medium and smaller contractors are not showing such big improvements, adds Turner.

'Procurement seems to be favouring the larger contractors and smaller contractors seem to have turned their backs on bidding for frameworks.' It is no secret that the cost of bidding is increasing and the lengthy procurement processes make some frameworks prohibitively expensive for smaller companies to bid for.

Consolidation in the market and changes in procurement have made a difference for the bigger firms, and the market is becoming less cut throat and more stable, says Hirst. This coupled with the sheer scale of work coming up makes it a very exciting place for engineers.

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