BMI View : We maintain our forecasts for construction industry value real growth in the UK at 3.5% for 2016. R esidential building will drive this growth, although we do not expect that government initiatives will boost output significantly. Several major infrastructure projects are yet to be fully factored into our forecasts due to slow progress on investment decisions , but already the UK has Europe's largest infrastructure project pipeline .
We forecast that the residential building market will remain buoyant - averaging real growth of 3.2% between 2016 and 2020. Upside risks to our outlook for the residential building segment will emerge in 2018; by 2017 local councils must submit plans to help the government reach its target of building 200,000 starter homes by 2020, or they will be forced to do so by central government.
Our decision to retain our bullish view on the UK's rail sector despite issues as Network Rail implemented projects under the CP5 spending period, was justified. Transport Secretary Patrick McLoughlin has subsequently reaffirmed the 2019 completion dates for major projects which were temporarily paused during a review. As such, our real growth forecasts for the rail infrastructure sector remain at an annual average of 10.2% between 2016 and 2019.
The first capacity auction run by National Grid following the passage of the Energy Bill reached the goal of maintaining and adding 49GW of capacity until 2018/2019, including 2GW of new gas-fired capacity.
|f = BMI forecast. Source: ONS, BMI|
|Construction industry value, GBPbn||101.08||104.82||109.70||113.48||118.02||123.03||128.45|
|Construction Industry Value, Real Growth, % y-o-y||7.44||3.50||3.50||1.75||1.90||2.05||2.40|
|Construction Industry Value, % of GDP||6.0||6.1||6.1||6.1||6.1||6.1||6.1|
The UK remains a top performing market in our Infrastructure Risk/Reward Index (RRI) for Western Europe and North America in Q116, with a score of 72.3
The large size of the UK's construction sector and continuing investment - especially in the rail sub-sector - help the country achieve an Industry Rewards score of 57.5.
The UK scores extremely well in global terms in the Country Rewards Index with a score of 88.9. The UK has a long-established and strong financial market, which is ideal for the infrastructure industry's need for long-term capital.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The United Kingdom Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's United Kingdom Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the British infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for United Kingdom to test other views - a key input for successful budgetary and planning in the British infrastructure market.
- Target business opportunities and risks in the British infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in United Kingdom.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.