Transport sector output forecast to increase

Transport sector output forecast to increase

In 2017, total contractors’ output in the transport sector is estimated at around £8.6bn, which was an increase on the previous year but below the 2015 level. Major transport infrastructure development programmes are largely driven by public sector funding under 5-year investment programmes, with funding allocated on an annual basis, and output tends to reflect this.

New roads and highways maintenance is the largest of the transport infrastructure sub-sectors, with activity levels mainly being driven by the first phase of the Highways Agency’s 5-year Roads Investment Strategy (RIS1), under which over £15bn of funding has been allocated for capital enhancement and renewals for the period 2015-16 to 2020-21. Other major road schemes are being delivered as part of the multi-modal Transport Strategy for the North, which sets out the strategic options for future transport investment in the north of England to boost the Government’s concept of a “Northern Powerhouse”, and separately in Scotland, Wales and Northern Ireland.

As a result of these and other ongoing schemes, roads construction output is forecast to increase in 2018 and 2019, as road improvement contracts under Highways England’s Collaborative Delivery Framework (CDF) also translate into increased output.

After the roads sector, rail accounts for the next largest share of transport infrastructure construction output. Recently, this sector has seen significant increases in contractors output and new orders, this is underpinned by a combination of major projects and regional frameworks. One major scheme that has been benefiting this sector in recent years is the Crossrail programme which is currently Europe’s largest construction project.

Rail construction output is expected to grow significantly during the period 2017-2019, underpinned by a substantial number of major schemes. These include the Bank Station redevelopment project, main tunnelling works on the Northern Line extension to Battersea and electrification of certain cross-country routes, the delayed Metropolitan Line extension project and enabling works on Phase 1 of the HS2 Project.

In the airports sector, proposed additional runway capacity at Heathrow should underpin future development, though major construction works are not likely to begin until 2021. Output in the airports sector is also expected to be boosted by a 4-year development programme at Manchester Airport and a £1.2bn capital investment programme over the next 5 years at Gatwick Airport.

Going forward, announcements of additional capacity and investment at the UK’s major airports, together with a number of smaller and medium sized projects at both major and regional airports should also generate additional work in the sector over the next few years. These smaller and medium sized projects include a £400m programme at London City airport and a smaller programme at Stansted airport, both of which are due to start in 2018.

In the UK Ports sector, around £300m is invested each year in upgrading and developing port facilities and this is expected to be maintained as several large development projects are taken forward. Additionally, major schemes are currently being planned or are progressing, including a significant expansion at the Port of Tilbury; the Western Docks Revival (DWDR) project at the Port of Dover; the second phase of Peel Ports Group Liverpool2 terminal expansion programme; and a major expansion of Southampton Docks.

Overall, the outlook for transport infrastructure construction is positive, with the Government recently committing to providing the biggest investment in transport infrastructure in years. Forecasts indicate increasing output and a significant pipeline of major projects under the National Infrastructure and Government Construction Pipeline (NIP). As part of the NIP, around £92bn is to be invested in transport infrastructure over the period to 2020-21, of which more than half will be put into railways projects.

The ‘Transport Infrastructure Construction and RMI Market Report - UK 2017-2021 Analysis' report is published by AMA Research, and is available now and can be ordered online at or by calling 01242 235724.

Find out more on our Transport and Infrastructure Hub.

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