Table of Contents
AMA Research have published the 5th edition of the report 'Utilities Construction Market Report – UK 2015-2019 Analysis'. This report incorporates original input and primary research, and represents an up-to-date and perceptive review of the market and its development. It includes a review of recent market trends and forecasts for the utilities construction market over the next few years.
Key areas covered:
• Detailed assessment of the market - analysis of market structure and recent developments in the market, with forecasts to 2019.
• Water sector analysis - market size, capital investment, water and sewerage construction output, key developments, leading providers.
• Electricity sector analysis - market size, capital investment, construction output, influence of renewables, growth prospects into the medium term.
• Gas & Telecoms sector analysis - market size, product mix, changes to sectors, investment and output, key companies, key influences etc.
• Procurement and key contractors - EU directives, recent contract awards, contractor profiles.
Key areas of insight include:
• Analysis of market performance in 2010-2014 – utilities output as part of the wider infrastructure market. Forecasts of market performance to 2019.
• Factors affecting the market and analysis of key market characteristics - (eg: energy legislation & European Directives, growing influence of the electricity sector, changes to regulatory framework in water sector, influence of 3G and 4G networks in telecoms sector, etc).
• Performance of each key sub-sector – water, electricity, gas and telecoms, quarterly analysis of output and new orders, influencing factors, forecasts to 2019.
• Procurement – European Purchasing Directives and the Utilities sector, contract thresholds, changes to purchasing procedures 2012-14.
• Key contractors operating in the utilities sector – contractor profiles, recent contracts awarded, etc.
Some of the companies included:
AMEC Foster Wheeler, Arup Group, Balfour Beatty, BAM Nuttall, Barhale Construction, Bechtel UK, Black and Veatch, Carillion, Costain, EDF Energy, Galliford Try, GDF Suez, Interserve, Kier, Laing O’Rourke, Morgan Sindall, Morrison Utility Services, Skanska UK, SSE, Vinci Construction, UK Power Networks.
Key areas covered in the report include:
• UK Construction Output – overview of UK construction market 2009-19, mix by sector 2014, key influencing factors, trends.
• Infrastructure and Utilities Market – size in terms of GB construction output, sector mix 2014, 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 2014-19, key influencing factors, and output forecasts to 2019.
SECTOR ANALYSIS - WATER, ELECTRICITY, GAS & 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 – 2009-14 with forecasts through to 2019, 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 2019 – 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 6 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 2019; 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.
The utilities sector comprises the water, energy and telecoms markets, which were previously operated as state run monopolies but have been opened to private competition for more than 25 years. Construction output for the utilities sector for Great Britain in 2014 was around £7.9bn and has experienced growth of 64% since 2008, outperforming the wider infrastructure market over the last 2-3 years due to outstanding growth in the electricity sector. Construction output in the electricity sector more than quadrupled 2008-14, and this accounts for the overall improvement in sector performance over the period.
The chart indicates that utilities construction output grew by 49% 2009-11 but only by 10% 2011-14 when growth in the electricity sector was partly offset by declines in the water and sewerage sectors. The level of capital spending within the utilities sector is underpinned particularly through 5 year asset management and renewals programmes for individual sub-sectors such as water and electricity.
Underpinning construction output growth for the electricity sector during the past three to four years has been the expansion of the renewables sector, in particular offshore wind. In addition, the decommissioning of outdated power stations (both fossil fuel and nuclear) and the construction of new generation capacity, as well as the programme of renewal and improvement to the transmission and distribution networks have all boosted construction output. The water sector benefits to a degree from the continued focus of the Regulator on improved customer service and water quality initiatives which have resulted in greater spending on improvements to mains and water treatment plants. The refurbishment of the gas distribution network and building of new gas storage facilities have assisted in boosting output growth in this sector in recent years. Telecoms revenues have remained steady over the period, despite increasingly competitive pricing for mobile contracts.
Current prospects for the utilities sector into the medium-term remain optimistic with output set to increase until 2019. Fundamental to this positive forecast remains the influence of Government policy commitments in a number of areas such as the Renewables Obligation, energy security and the rollout of superfast broadband. These policies are underpinned by the Government’s National Infrastructure Plan and the implementation of a number of measures to incentivise private investment. Another key influence is the influence of the regulatory environment in the water and energy sectors, which provides a framework for medium-term programmes of capital investment.
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