INFRASTRUCTURE WORK will decline for the second year running, largely as a result of the delays in letting civils contracts for the Channel Tunnel Rail Link, Construction Forecasting & Research claimed this week.
As late as November last year, CFR was predicting a 2% increase in civils output during 1998, following a 2% decline in 1997. But uncertainty over the CTRL contracts has led forecasters to take a more pessimistic view.
Infrastructure output last year is now estimated to have fallen by 6%, the biggest drop for three years, with a further 2% decline predicted for this year. Recovery is now delayed until 1999, when output should creep above 1997 levels by rising 5%.
Cutbacks in the road programme and the government's recent moratorium on the construction of gas-fired power stations also lie behind CFR's forecast downgrade.
The lack of civils work has also had an impact on overall output levels. The CFR forecast for all new construction work during 1998 is down 0.4 percentage points to 2.4%. The fall is mitigated by an upgrading of output in the commercial and industrial sectors - up 3 to 8% and 4 to 5% respectively - reflecting work being 'pulled forward' by clients. In 1999 commercial output has been downgraded 2 to 3% and industrial work 5 to -7%. Total new work is now predicted to rise just 0.9%, 2.1 lower than predicted last November.
The Construction Confederation has reacted to market uncertainty with a budget submission proposing measures such as standardisation of private finance initiative contracts; and replace- ment of competitive tendering with a reserved bidder system.