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Civils firms stay positive for 2015

Civils firms remain positive about 2015 despite evidence of plunging workloads in December and the looming general election.

Two reports out in the first few days of this year suggested that infrastructure work took a hit in the last month of 2014.

Meanwhile the build up to May’s general election began in earnest after the Christmas break, pushing other issues to the background.

On the other hand, Crossrail construction is at full speed, an imminent decision is expected on Hinkley Point, and a huge road building pipeline has been announced.

The Civil Engineering Contractors Association said it retained hopes of a strong year for its members.

Chief executive Alasdair Reisner said: “We’ve not had any indication of a dip in workloads in December. The statistics are probably just due to the time of year; the weather; the way Christmas fell.

“We don’t expect a slowdown over the winter and are cautiously optimistic about the year ahead.

“There are projects in the pipeline, although there is also a general election that will inevitably have an impact.”

Reisner said that although the Purdah period beginning on 30 March may cause delays in infrastructure decision making, there could be another side of the story.

“We may see a small boost as decisions are brought forward into February and March,” he said. “But then there will be a slow down until the election. I would anticipate some hold-ups.”

Civils firms are hopeful of movement soon on the legislation needed to pave the way for transformation of the Highways Agency into a government-owned company.

“The big thing we would like to see happen before Parliament shuts down for the election is royal assent for the Infrastructure Bill,” said Reisner.

The civils industry could do with some positive news, after the year started with evidence of a tough end to 2014.

Construction intelligence unit Glenigan found that the value of infrastructure starts dipped by 11% in December to its lowest level since February 2013.

Glenigan’s Civil Engineering Index, which measures the value of projects starting on site over the previous three months, excluding very small and very large schemes, read 117 in December.

This was down from 132 in November, and a high of 178 in May, to a level last seen 22 months earlier.

Meanwhile the Construction Purchasing Managers’ Index from Markit in conjunction with the Chartered Institute of Procurement & Supply revealed that civil engineering activity dipped in December for the first time since May 2013.

The study gave a reading of 49.1 to the civils sector in December, where 50 represents parity with the previous month.

However, at 57.6, the overall CPMI reading showed the construction industry as a whole was continuing to grow.

CIPS chief executive David Noble said: “The sector continues on its levelling path this month, with procurement and supply management professionals reporting continued strong growth but with a weaker trajectory than that seen in recent months.

“Levels of positive outlook remain high with 52% of respondents expecting a rise in business activity in 2015, though this month’s sudden drop in the strength of the civil engineering sub-sector and this year’s general election are adding a note of caution.”

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