CIVIL ENGINEERING is set to become the second fastest growing construction market over the next two years.
NCE 's unique analysis of three main industry forecasts from the Construction Products Association, Construction Forecasting & Research and Hewes & Associates indicates that civil engineering work will grow by 11.8% during 2001-2002. Only public housing will be more active.
The infrastructure sector is on course for steady growth for the first time since the completion of the Channel Tunnel and downgrading of the Tories' road building programme. The civil engineering surge comes just as the huge commercial building market declines for the first time since the early 90s (see graph).
The positive future for UK civil engineering is already being reflected in the order figures produced by the Department of the Environment, Transport and the Regions.
Infrastructure orders had been declining since the start of the first section of the Channel Tunnel Rail Link. However, the first two quarters of 2000 have seen consecutive rises.
Significantly, growth has been delivered by the road and rail markets.
Road spending had been in free fall since the mid 90s but the gradual acceleration of road starts has seen the rolling 12 month total of orders increase by 46% since the first quarter of 1999. The CPA predicts 'double digit' growth in the sector over the next two years.
Hewes is slightly more cautious, suggesting 7.8% growth next year and 8.2% in 2002.
The DETR has no figures for the rail market alone, but the sector dominates the 'other' category. After the CTRL bulge orders dropped away, with contractors and consultants complaining Railtrack was not living up to its spending promises. But again, the first half of 2000 has seen a rise in spending.
However, according to Hewes, an unprecedented one third increase in output is forecast for 2001.
The picture is much less rosy in the water and sewerage sector. The dramatic drop in orders during the first half of last year has stabilised. But none of the forecasters are positive about the prospects for growth, except in Scotland, with most predicting a hiatus in spending during 2001 as the industry gets to grips with the implications of the regulatory review.
Overall, UK construction output is expected to increase by 6.3% in the three years 2000 to 2002. The economy as a whole is forecast to outstrip it slightly by growing 8%. However, the growth compares favourably with the 5.4% rise in the previous three year period (1997-1999) and in 2002 it is predicted to beat GDP growth.
Although the forecasts bring mainly good news, they come as the construction industry starts to feel its first slow down in new build work since 1995. While the repair and maintenance market - which accounts for around half of all construction work - will surge by 11.9%, the new build market will grow just 1.6% during 2000-2002.
There is also a final warning that with UK construction relying so heavily on public sector work the 'political risk' is unusually high. A decision, for example, to divert funds to health and education to meet the demanding targets set by Government could have a massive impact on construction work.
Output forecast: % change 1999 2000 2001 2002
Public -11.9 -0.3 5.7 7.0
Private -5.4 -1.0 - -1.2
Total housing -6.2 -1.0 0.7
Infrastructure -0.2 1.7 4.5 7.3
Public 12.2 1.8 4.0 2.7
Industrial -0.4 -9.7 -3.6 3.6
Commercial 13.0 2.4 -3.8 -3.0
Total building 9.9 -0.2 -1.9 -0.4
New (non-housing) 7.2 0.3 -0.3 1.6
All new work 3.8 - -0.1 1.2
Refurbishment and maintenance
Public -4.7 5.1 9.4 10.6
Private -2.3 3.5 2.8 1.2
Public -1.2 2.7 4.9 4.3
Private -1.4 2.3 1.7 2.4
All R&M -2.4 3.4 4.3 4.2
ALL WORK 0.8 1.6 2.0 2.7
Sources: These forecasts are averages calculated from predictions produced by the Construction Products Association, Construction Forecasting & Research and Hewes & Associates.