Executive Summary

The UK civil engineering market had an estimated value of £9.12bn in 1993. There are now indications that, after several years of strong growth in output, the industry is likely to see a fall as a number of major projects have been completed without sufficient immediate follow on replacements.

Civil engineering is an important sub-sector of the overall UK construction industry and is responsible for around fifth of its output. The industry handles the more complex and structurally demanding parts of construction work and derives much of its output from projects such as road construction, tunnelling, building bridges and railways and providing groundwork and structural engineering for projects in many sectors of the economy.

Companies in the civil engineering business are frequently part of larger groups with activities spread across the whole construction sector and sometimes other business areas. As a consequence of the recent recession, a number of companies have restructured their operations in order to avoid a continution of the substantial losses and low profits experienced by a number of the players. The industry has also suffered from the effects of management deficiencies together with the tightening of margins which has been the consequence of more competitive tendering conditions.

Due to the privatisation of utilities and other sectors, and the Government's encouragement of private finance, especially for large transport-related projects, the civil engineering industry is coming under a number of new influences which are changing the patterns of business. More companies are becoming involved in consortia or joint venture operating companies in order to finance, design, build and operate facilities.

Despite the possibilities of a downturn in output of the industry for 1994 and 1995, the potential for new infrastructure, industrial and commercial projects in the UK look promising but the exact timing for much of the work is uncertain. At the present, 1996 appears to be the year in which an upturn in output is likely, bearing in mind that many projects take several years from initiation to completion. In overseas markets, UK contractors have been achieving a number of successes and the trend for many civil engineering companies to increase the proportion of their work derived from outside the UK is expected to continue.

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