UK Construction Industry

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(No Transcript)
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UK Construction Industry

• Presented by Tom Foulkes, Director General, ICE
• Madrid - 15th October 2007
• Asociación de Ingenieros de Caminos

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UK CONSTRUCTION INDUSTRY

• The UK construction industry consists of over 250
  000 firms employing 2.1 million people in a
  multitude of roles. The sector is defined as one
  which embraces the construction materials and
  products suppliers and producers building
  services manufacturers, providers and installers
  contractors, sub-contractors, professionals,
  advisors and construction clients and those
  organisations that are relevant to the design,
  build, operation and refurbishment of buildings.
• The UK construction output is the second largest
  in the EU and contributes 8.2 of the nations GVA
  (Gross Value Added). UK designers, civil
  engineers, contractors, component product
  manufacturers have a worldwide reputation for
  working overseas, providing high-tech solutions
  to environmental, transport building projects.
  (Statistics on the sector are available from the
  Construction Statistics and Economics pages.)

Source BERR website (formerly DTI)
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UK CONSTRUCTION SECTOR

• Difficult to define
• Approx. 350,000 companies
• Approx. 10 to UK GDP
• Approx. 3 million people employed

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UK CONSTRUCTION INDUSTRY
As the UK economy grows, so does the construction
sector. Since 1999, the country's GDP has grown
by an average annual percentage of just over 5,
translating into a boom for the construction and
building materials industries.  In 2003, the
construction industry employed 6.6 of Britain's
total workforce and generated around 10 of its
GDP.   UK economic, construction and
construction-related statistics, 1999-2003
  1999 2000 2001 2002 2003
All industry GDP m.   903,167 950,561 994,309 1,044,145 1,099,896
Construction GVA m.   41,721 45,475 50,002 55,491 61,538
Mining quarrying GVA m. 17,403 25,239 24,452 22,844 27,500
Construction employment '000 1,794 1,843 1,862 1,888 1,976
All industry GVA m.   797,116 838,490 881,163 926,275 976,148
All industry employment '000 28,667 29,078 29,400 29,527 29,798
GVA or Gross Value Added GDP less taxes incl.
VAT, plus product subsidies.  Figures shown are
at basic prices Source United Kingdom National
Accounts (The Blue Book) 2004, ONS
Source United Kingdom National Accounts (The
Blue Book) 2004, ONS
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UK CONTRACTORS

• The UK civils contracting industry continues to
  move towards domination by five or six
  mega-global contractors.
• This years NCE Contractors File shows that, of
  the 24bn work in hand, 22bn (92) is on the
  order books of the top 20 contractors.
• Emboldened by their growing order books, and with
  turnover among the top 20 up 41 to 11bn in the
  last year, mergers and acquisitions will continue
  to top the agenda of the big players.
• The horizon looks buoyant for the next 5 years at
  least, particularly in the South East, and as a
  result contractors can pick and choose the work
  they take on. This could lead to more
  construction players from overseas entering the
  UK market e.g. Hochtief and Vinci.
• Future growth is assured but concerns about
  finding the right people remain. Availability
  and capability of people is an on-going challenge
  in a hugely competitive market place.

Source NCE Contractors File August 2007
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UK CONTRACTORS
Financial facts top 20 companies by civils turnover Financial facts top 20 companies by civils turnover Financial facts top 20 companies by civils turnover Financial facts top 20 companies by civils turnover Financial facts top 20 companies by civils turnover Financial facts top 20 companies by civils turnover
  Company Name Civils turnover (m) Last Year (m) Civils work in hand (m) Last Year (m)
1 (1) Balfour Beatty 1897 1469 3520 4032
2 (2) Laing O'Rourke 1244 812 2313 999
3 (13) Skanska UK 821 283 2400 654
4 (6) Galliford Try 870 538 2300 1100
5 (4) Carillion 803 580 1001 817
6 (7) Edmund Nuttall 572 470 1114 1357
7 (9) Amey Infrastructure Services 507 425 1739 1624
8 (3) Costain Group 488 600 1362 1734
9 (22) Norwest Holst Civil Engineering 409 140 24 0
10 (12) May Gurney 406 330 800 870
11 (10) Alfred McAlpine Project Services 402 373 775 710
12 (8) Ringway Group 388 450 1200 920
13 (14) Morgan Est 324 248 1200 941
14 (15) J Murphy Sons 310 242 650 382
15 (19) Black Veatch 290 165 490 500
16 (17) Dean Dyball 247 183 0 0
17 (5) Sir Robert McAlpine 180 570 300 1300
18 (18) Clancy Docwra 167 166 500 500
19 (32) Wrekin Construction Co 133 83 61 0
20 (26) Taylor Woodrow Construction 124 108 250 0
Source NCE Contractors File August 2007
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UK CONTRACTORS

• In 2006, the revenue generated by the top 20
  contractors accounted was 83 of total revenue
  produced by all contractors
• This has risen from 69 in 2005

Source NCE Contractors File August 2004, 05, 07
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UK CONSULTANTS

• This years NCE Consultants File shows that fees
  were up 20 to 7.4bn and more growth is
  predicted next year, especially in London and the
  South East.
• Staff numbers have risen almost 13.5 to 131,943
  in a market where it is difficult to find people.
  Consultants are increasingly looking at other
  disciplines such as mathematicians and
  geographers or importing engineering skills from
  overseas to fill the gaps.
• In the civil engineering core sectors, fees in
  road and rail have increased 34 and 33 and
  earned UK consultants 1.03bn and 780m
  respectively in 2006.
• Mirroring the current debate about climate
  change, the environment sector increased a huge
  83 producing 765m of revenue for the
  consultants, overtaking water to become the
  fourth strongest market.
• Like contractors, mergers and acquisitions were
  also a big story with Black Veatch, Scott
  Wilson and White Young Green in the forefront.

Source NCE Consultants File March 2007
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UK CONSULTANTS
Top 20 Fee Earners Top 20 Fee Earners Top 20 Fee Earners Top 20 Fee Earners
  Company Name Fees (m) 2006 2005 (m)
1 (1) Atkins 1060 947
2 (2) Mott MacDonald 566 463
3 (3) Arup 501 411
4 (4) WSP 440 360
5 (6) Mouchel Parkman 381 255
6 (5) Jacobs 329 305
7 (8) RPS 300 200
8 (10) Scott Wilson 251 175
9 (7) Halcrow 242 210
10 (9) Capita Symonds 195 180
11 (12) EC Harris 167 143
12 (13) White Young Green 165 136
13 (14) Faber Maunsell 148 132
14 (15) Parsons Brinckerhoff 144 129
15 (-) Turner Townsend 141 0
16 (16) Hyder Consulting 139 124
17 (17) Davis Langdon 122 106
18 (19) Amey Infrastructure 108 84
19 (18) MWH 106 102
20 (21) URS Corporation 97 75
Source NCE Consultants File March 2007
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UK CONSULTANTS

• In 2006, the fees generated by the top 20
  consultants represented 75.7 of total revenue
  produced by all consultants
• This is relatively unchanged since 2004, however
  has grown since 2002 and 2003 when the proportion
  was 62and 64.

Source NCE Consultants File March 2005 and 2007
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UK CONSULTANTS

• Overseas turnover in 2006 represented 23 of the
  total turnover for UK consultants.
• The proportion of overseas turnover in 2006 is
  lower than the previous 4 years where an average
  of 28 turnover was achieved overseas.

Source NCE Consultants File March 2005 and 2007
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HEALTH SAFETY IN THE UK CONSTRUCTION INDUSTRY

• 2.1 million people work in Britains construction
  industry, making it the countrys biggest
  industry. It is also one of the most dangerous.
  In the last 25 years, over 2,800 people have died
  from injuries they received as a result of
  construction work. Many more have been injured or
  made ill.

Source HSE construction industry statistics
2005/06
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HEALTH SAFETY IN THE UK CONSTRUCTION INDUSTRY

• Recent figures published by HSE for 2006/07 show
  there were 77 fatalities and the rate of fatal
  injury was 3.7 deaths per 100 000 workers. This
  is uncharacteristically up on previous years
  because over the previous 15 years, there has
  been a statistically significant downward trend
  in the rate of fatal injury to workers on
  average a 3.9 year on year decrease. However,
  the higher number and rate for 2006/07 changes a
  pattern consistent with continued reduction up to
  2005/06 into one of no change since 2002/03

Source HSE construction industry statistics
2006/07
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HEALTH SAFETY IN THE UK CONSTRUCTION INDUSTRY

• There were 59 fatal injuries to workers in
  construction in 2005/06, a decrease on the
  previous year of 69 fatalities. Of these 59
  fatalities, 42 were employees and 17 were
  self-employed, compared to 55 and 14 in 2004/05.
• 24 deaths (41) were due to falls from a height
  and 8 (14) were due to being hit by a moving
  vehicle.
• In 2005/06, 28 of all worker deaths were in the
  construction industry. However, the rate of fatal
  injury to workers in construction fell to 3.0 per
  hundred thousand workers, the lowest rate on
  record.

Source HSE construction industry statistics
2005/06
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HEALTH SAFETY IN THE UK CONSTRUCTION INDUSTRY

• This demonstrates encouraging signs that the
  industry has taken ownership of its health and
  safety performance and worked hard to achieve the
  lowest incidence rates ever.

Source HSE construction industry statistics
2005/06
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HEALTH SAFETY IN THE UK CONSTRUCTION INDUSTRY

• There has been very good progress in reducing
  injuries due to falls which has traditionally
  been one of the main causes of fatal and major
  injuries. However, slips and trips and manual
  handling injuries are increasing. In 2005/06
  there were 981 major injuries caused by slips,
  trips or falls on the same level.
• Most of those accidents could be easily avoided
  by effective management of good order issues on
  sites. In particular sites need to be kept tidy,
  which is hard work and requires persistence.
  There needs to be more focus on these areas,
  while maintaining the progress on falls from
  height.

Source HSE construction industry statistics
2005/06
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HEALTH SAFETY IN THE UK CONSTRUCTION INDUSTRY

• Recent figures published by HSE for 2006/07 show
  there were 77 fatalities and the rate of fatal
  injury was 3.7 deaths per 100 000 workers. This
  is uncharacteristically up on previous years
  because over the previous 15 years, there has
  been a statistically significant downward trend
  in the rate of fatal injury to workers on
  average a 3.9 year on year decrease. However,
  the higher number and rate for 2006/07 changes a
  pattern consistent with continued reduction up to
  2005/06 into one of no change since 2002/03

Source HSE construction industry statistics
2006/07
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UK CONSTRUCTION SUMMARY

• Big sector
• Strong growth
• Excellent prospects 10 years
• Emphasis on sustainability
• Concerns about skills shortage
• Increasing procurement by partnering and PFI
• Focus on health safety