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Utilities Construction Market Report - UK 2012-2016 Analysis
AMA Research, March 2012, Pages: 94
AMA Research has recently published the fourth edition of the report ""Utilities Construction Market Report - UK 2012 -2016 Analysis"". The report represents an informed, up-to-date and detailed review of the market and offers excellent value for money.
Key sectors covered include:
UTILITIES MARKET – construction output GB quarterly analysis of output & new orders, output by sector.
WATER, ELECTRICTY, GAS & TELECOMS - output, quarterly analysis, influences, forecasts.
PROCUREMENT AND KEY CONTRACTORS - EU Directives, recent contract awards, contractor profiles.
The utilities construction sector continues to offer growth opportunities and is likely to outperform the larger infrastructure market over the period to 2016, given the influence of the transport sectors which are faced by some significant cuts to budgets.
The water industry looks set for good growth over this period, buoyed by the current AMP 5 programme which will be focussed on maintenance and replacement of assets and improvements to drinking water quality, also the electricity sector is likely to see significant improvement in output for 2011 underpinned by contribution from ongoing renewals and replacement programmes. The impact of renewable construction is also likely to positively impact on the electricity sub-sector with wind farms in particular stimulating this sector and with the nuclear sector impacting in the medium to longer term future. In addition, prospects for the gas sector remain relatively positive with the likelihood of further onshore and offshore gas storage facilities needed to address the UK’s increasing need to import gas.
The report assesses these opportunities in the light of the current difficult economic situation and looks forward to review future prospects for the individual sectors of the industry.
Key issues of particular interest:
Performance of each of the key sub-sectors of the utilities market.
Performance of utilities sector against overall infrastructure market.
Performance 2004-11 and forecasts for 2012 to 2016, key influencing factors, effects of capital investment programmes.
Impact of energy legislation and European Directives on overall market growth and its effect on electricity generation in particular.
Leading contractors working in the utilities sectors.
Key areas covered in the report include:
UTILITIES MARKET OVERVIEW
- UK Construction Output – overview of UK construction market 2006-2016, mix by sector 2011, key influencing factors, trends.
- Infrastructure and Utilities Market – size in terms of GB construction output, sector mix 2011, key trends in infrastructure sectors.
- Utilities Market – sector mix, output by sector, quarterly analysis by output and new orders, key influencing factors, future prospects.
- Utilities output forecasts – assessment of potential performance 2012-16, key influencing factors, and output forecasts to 2016.
SECTOR ANALYSIS - ELECTRICITY, GAS, WATER AND TELECOMS.
- Industry structure – by sector and by country for individual sectors, regulatory control, industry size, factors influencing structure of the industry, etc.
- Construction output by sector – 2006-16 with forecasts through to 2016, quarterly analysis of output and new orders.
- Future investment by sector – current plans for capital investment and future investment, influence of legislative or regulatory controls.
- Key trends in the market place - factors of influence; are the trends and factors of influence set to continue, or will there be changes?
- Identification of key companies for each sector – profiles of key utilities companies involved in each UK sector - eg water companies, gas & electricity generation, transmission & distribution organisations, leading telecoms companies.
- Current forecasts to 2016 – construction output by electricity, gas and total utilities in GB.
PROCUREMENT AND LEADING CONTRACTORS
- Procurement of utilities works – European Procurement Directives, exemptions for utilities companies, current contract thresholds and those applicable to utilities sector.
- Recent contract awards in utilities sector – includes recent AMP 5 contract awards in water sector as well as some major electricity contracts recently awarded.
- Structure of utilities contracting sector – analysis by employee numbers for water, electricity and communications sectors, recent corporate activities.
- Leading contractors in utilities sectors – company profile, area of activity, recent utilities works, contracts awarded, major clients in utilities sector, etc.
REVIEW OF FUTURE PROSPECTS
- Trends over the medium-term, and forecasts to 2016; key influencing factors within the market, potential influence of regulative and legislative changes.
- Recognition of need to secure UK’s future energy supplies – change to renewable generation as well as greater influence of nuclear power likely to boost electricity sector output.
1.2 SOURCES OF INFORMATION
2. SUMMARY AND FUTURE PROSPECTS
2.2 FUTURE PROSPECTS
3. ECONOMIC ENVIRONMENT
3.2 INFLATION & INTEREST RATES
3.4 HOUSEHOLD CONSUMPTION
3.5 HOUSING & CONSTRUCTION
3.7 POPULATION PROFILE
4. CONSTRUCTION OUTPUT IN THE UTILITIES SECTOR
4.1 THE UTILITIES CONSTRUCTION MARKET
4.2 OVERALL UK CONSTRUCTION OUTPUT
4.2.1 Sector Mix UK
4.2.2 Sector Mix 2008-11 United Kingdom
4.3 INFRASTRUCTURE OUTPUT GREAT BRITAIN
4.3.1 New Work
4.3.3 Infrastructure Sectors
4.3.4 National Infrastructure Plan
4.4 UTILITIES CONSTRUCTION OUTPUT
4.4.1 Output by Sector
4.4.2 Output and New Orders Quarterly Analysis
4.5 FUTURE PROSPECTS AND FORECASTS – UTILITIES CONSTRUCTION
5. UK UTILITIES CAPITAL INVESTMENT AND OUTPUT
5.1 WATER INDUSTRY
5.1.1 Industry Structure
5.1.2 Industry Size
5.1.3 Construction Output in Water Sector
5.1.4 Output and New Orders Quarterly Analysis
5.1.5 Capital Investment
5.1.6 Water Companies
5.2 ELECTRICITY INDUSTRY
5.2.1 Structure and Size of the Electricity Industry
5.2.2 Construction Output in Electricity Sector
5.2.3 Output and New Orders Quarterly Analysis
5.2.4 Future Investment
5.2.5 Electricity Companies
5.3 GAS INDUSTRY
5.3.1 Structure and Size of the Industry
5.3.2 Construction Output in Gas, Communications and Air Sector
5.3.3 Output and New Orders Quarterly Analysis
5.3.4 Gas Companies
5.4 TELECOMS INDUSTRY
5.4.1 Structure of the Industry
5.4.2 Telecoms Industry Revenues
5.4.3 Capital Expenditure
6. UTILITIES PROCUREMENT AND MAJOR CONTRACTORS
6.1 PROCUREMENT OF UTILITIES WORK.
6.1.1 Current Directives
6.1.2 Current Contract Thresholds
6.1.3 Recently Awarded Utilities Contracts
6.2 STRUCTURE OF THE UTILITY CONTRACTING INDUSTRY
6.3 MAJOR CONTRACTORS INVOLVED IN THE UTILITIES SECTOR
LIST OF ABBREVIATIONS
List of Tables and Figures
CHART 1: UTILITIES MARKET GB CONSTRUCTION OUTPUT 2005 TO 2016 - BY VALUE (£BN AT CURRENT PRICES)
CHART 2: INTEREST RATES AND INFLATION (CPI) FROM 1992-2016
CHART 3: PDI & SAVINGS RATIO AT CURRENT PRICES 1992-2016
TABLE 4: EXCHANGE RATE FLUCTUATIONS 2006-2012 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES
CHART 5: AGE DISTRIBUTION OF THE RESIDENT UK POPULATION MID-2008 (‘000)
CHART 6: UK CONSTRUCTION OUTPUT (NEW WORK AND RMI) 2005 TO 2016 – BY VALUE (£ BILLION CURRENT PRICES)
TABLE 7: UK CONSTRUCTION OUTPUT BY END USE SECTOR 2010 – BY VALUE (£MILLION AT CURRENT PRICES)
CHART 8: UK CONSTRUCTION OUTPUT BY SECTOR 2008 TO 2010 - % BY VALUE
CHART 9: GB CONSTRUCTION NEW WORK OUTPUT FOR INFRASTRUCTURE 2005 TO 2016 – BY VALUE (£BN AT CURRENT PRICES)
TABLE 10: GB CONSTRUCTION NEW WORK OUTPUT FOR INFRASTRUCTURE BY PUBLIC AND PRIVATE SECTOR 2005 TO 2010 – BY VALUE (£M CURRENT PRICES)
CHART 11: GB INFRASTRUCTURE RMI OUTPUT Q1 2010 TO Q3 2011 – BY VALUE (£ MILLION AT CURRENT PRICES)
CHART 12: INFRASTRUCTURE OUTPUT (NEW WORK) BY SECTOR – ROADS, RAIL, WATER, ELECTRICITY ETC. GREAT BRITAIN 2008 AND 2010 - % BY VALUE
TABLE 13: UTILITIES CONSTRUCTION OUTPUT, % OF TOTAL INFRASTRUCTURE OUTPUT (GREAT BRITAIN) 2005-2011 VALUE £M CURRENT PRICES
CHART 14: UTILITIES CONSTRUCTION OUTPUT GB BY SECTOR WATER, SEWERAGE, ELECTRICITY ETC, 2005 TO 2010 - BY VALUE (£M AT CURRENT PRICES)
TABLE 15: UTILITIES MARKET GB OUTPUT MIX BY SUB-SECTOR WATER, SEWERAGE, ELECTRICITY ETC. 2005, 2008 AND 2010 - % BY VALUE
CHART 16: UTILITIES OUTPUT AND NEW ORDERS GB QUARTERLY ANALYSIS Q1 2008 TO Q3 2011 – BY VALUE (£BN AT CURRENT PRICES)
CHART 17: UTILITIES MARKET GB CONSTRUCTION OUTPUT 2010 TO 2016 - BY VALUE (£BN AT CURRENT PRICES)
TABLE 18: WATER INDUSTRY (ENGLAND AND WALES) TURNOVER & OPERATING PROFIT 2005-06 TO 2010-11 – BY VALUE (£M CURRENT PRICES)
CHART 19: WATER & SEWERAGE SECTOR CONSTRUCTION OUTPUT (GB) 2005 TO 2016 – BY VALUE (£M AT CURRENT PRICES)
CHART 20: WATER INDUSTRY SECTOR OUTPUT AND NEW ORDERS GB QUARTERLY ANALYSIS Q1 2008 TO Q3 2011 – BY VALUE (£M AT CURRENT PRICES)
CHART 21: GROSS CAPITAL INVESTMENT BY WATER COMPANIES (ENGLAND AND WALES) 2005-06 TO 2010-11 – BY VALUE (£M AT CURRENT PRICES)
TABLE 22: AVERAGE ANNUAL CAPITAL INVESTMENT BY WATER COMPANIES (ENGLAND AND WALES) 1990-95 TO 2010-15 – BY VALUE (£BN)
CHART 23: AMP 5 CAPITAL INVESTMENT PROGRAMME BY APPLICATION – ENSURING CAPACITY, MAINTENANCE, DRINKING WATER IMPROVEMENTS ETC 2010-15 - % BY VALUE
TABLE 24: NORTHERN IRELAND WATER – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 25: SCOTTISH WATER – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 26: ANGLIAN WATER – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 27: DWR CYMRU – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 28: NORTHUMBRIAN WATER – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 29: SEVERN TRENT WATER – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 30: SOUTH WEST WATER – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 31: SOUTHERN WATER – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 32: THAMES WATER – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 33: UNITED UTILITIES – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 34: WESSEX WATER – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 35: YORKSHIRE WATER – KEY INDICATORS, GEOGRAPHY, CUSTOMERS, WATER SUPPLY, NETWORK, CAPITAL INVESTMENT ETC.
TABLE 36: COMPANIES SUPPLYING WATER ONLY SERVICES ENGLAND AND WALES
TABLE 37: NORTHERN IRELAND CURRENT ELECTRICITY SUPPLY LICENSE HOLDERS
CHART 38: ELECTRICITY SECTOR CONSTRUCTION OUTPUT (GB) 2005 TO 2015– BY VALUE (£ BILLION AT CURRENT PRICES)
CHART 39: ELECTRICITY SECTOR OUTPUT AND NEW ORDERS GB QUARTERLY ANALYSIS Q1 2008 TO Q3 2011 – BY VALUE (£M AT CURRENT PRICES)
TABLE 40: KEY REVENUE AND OPERATING PROFIT FINANCIAL INDICATORS NATIONAL GRID UK OPERATIONS (£M)
CHART 41: GAS, COMMUNICATIONS & AIR SECTOR CONSTRUCTION OUTPUT (GB) 2005 TO 2016– BY VALUE (£BN AT CURRENT PRICES)
CHART 42: GAS, COMMUNICATIONS & AIR OUTPUT AND NEW ORDERS GB QUARTERLY ANALYSIS Q1 2008 TO Q3 2011 – BY VALUE (£M AT CURRENT PRICES)
CHART 43: UK FIXED AND MOBILE TELECOMS CONNECTIONS 2005 TO 2010 - % BY PROPORTION OF CONNECTIONS FIXED, ORANGE, O2, VODAFONE ETC
CHART 44: UK TELECOMS INDUSTRY REVENUE BY SECTOR 2005 TO 2010 – RETAIL, WHOLESALE, TOTAL VALUE (£BN)
CHART 45: UK TELECOMS INDUSTRY REVENUE BY SERVICE TYPE MOBILE DATA, VOICE & ACCESS, CORPORATE, FIXED ETC 2005 TO 2010 – BY VALUE (£BN)
TABLE 46: UK TELECOMMUNICATIONS INDUSTRY TOTAL TURNOVER AND NET CAPITAL EXPENDITURE 2008-10 – BY VALUE (£BN)
TABLE 47: EU THRESHOLDS FOR ALL SECTORS 2012 AND 2013 – BY VALUE
TABLE 48: UTILITIES CONSTRUCTION CONTRACTORS 2010 – SIZE OF BUSINESS BY NUMBER OF EMPLOYEES
The utilities sector comprises the water, energy and telecoms which were previously operated as state run monopolies but have been opened to private competition over the last 25 years. Construction output for the utilities sector for Great Britain in 2011 was £6.7bn having experienced 39% increase on 2009 following growth of 17% 2005-09. Market performance was due in part to good growth from the electricity sector which experienced a 20% rise in construction output for 2010.
Underpinning performance 2005-11 has been the level of capital spending within the individual sub-sectors particularly through 5 year asset management and renewals programmes for sectors such as water and electricity. However the utilities market has not been immune to recessionary pressures with revenues from both business and household customers having been affected by reduced demand for water and energy over the last 2 years.
The structure of the UK water industry is not uniform with greater levels of private company involvement in England and Wales compared with Scotland and Northern Ireland. Construction output in the water sector in Great Britain grew by 58% 2005-11 and sector value of £3.4bn in 2011.
The electricity sector in the UK also has major structural differences between Great Britain and Northern Ireland with the level of competition in the market in Northern Ireland having developed at a later stage than in Great Britain. Output for the electricity sector for Great Britain has been more volatile than the water sector growing from a low point of £665m in 2005 and increasing to £1.7bn in 2011.
Construction output for the gas sector remains difficult to estimate due to its inclusion in a “bundled” category of smaller infrastructure sectors. However, the refurbishment of the gas distribution network, the completion of inter-continental connectors and building of new gas storage facilities have all assisted in boosting output growth in recent years.
The telecoms sector is the most open of the utilities sectors in the UK with the regulator having removed pricing controls in 2006 since the market was viewed to be fully open to competitive forces. However, telecoms revenues have been squeezed over the last 12-18 months by increasing competitive pricing for mobile contracts and for faster broadband services – particularly when offered as a bundled service.
Current prospects for the utilities sector into the medium-term remain optimistic with output set to increase to around £7.8bn. Fundamental to this positive forecast remains the influence of the private sector within the utilities market which has left it relatively unscathed by central government capital budget cuts. Current forecasts indicate that the utilities sector is likely to outperform the larger infrastructure market over the period – given the influence of the transport sectors which are faced by some significant cuts to budgets.
- Arup Group
- Balfour Beatty
- BAM Nuttall
- Barhale Construction
- Bechtel UK
- Black and Veatch
- Clancy Group
- Daniel Contractors
- Galliford Try
- John Laing
- Laing O’Rourke
- May Gurney
- McNicholas Construction
- Morgan Sindall
- Morrison Utilities
- Murphy Group
- Sir Robert McAlpine
- Skanska UK
- Vinci Construction
- WS Atkins.