Fragile recovery needs government support

The UK’s leading infrastructure contractors have warned that signs of growth in the sector may be extinguished unless the government delivers on recent investment commitments.

Results from the Civil Engineering Contractors Association (CECA) Workload Trends survey for the last quarter of 2011 published today show growth in the sector for the first time in more than three years.

Five per cent more of those who responded to the survey reported increasing workloads when compared with those reporting declines, lifting figures for the sector out of the red for the first time since the onset of the global economic crisis in 2008.

The government has identified the infrastructure sector as being critical to returning the UK economy to growth. At his Autumn Statement Chancellor George Osborne committed additional funding to key projects to support this growth.
Yet analysis of the survey results shows that the improvement reported in Q4 2011 was driven largely by activity in the regulated sectors such as rail, water and sewerage. Activity in the publicly-funded roads sector continues to fall.

Commenting on the results, CECA director of external affairs Alasdair Reisner said:

“However, we would be extremely cautious about any suggestion that these figures suggest a sustained improvement in the sector. Most of the growth indicated comes from regulated sectors that are currently at or near the peak of their spending cycles.
“Our concern is that as spending in these areas falls away over the coming months, there may not be sufficient activity elsewhere to sustain workloads.
“For this reason it is essential that the government holds firm on its commitments to infrastructure made at the Autumn Statement. By doing so it will help secure vital contributions to growth, while supporting the future of the UK’s infrastructure supply chain.”

Tags: , ,

Comments are closed.