The Civil Engineering Contractors Association (CECA) has warned that a flatlining infrastructure sector could spell trouble for the economy.
In the first national poll since the EU referendum the companies that upgrade and maintain the UK’s infrastructure have said that growth in the sector has ground to a halt.
CECA has published results from its quarterly Workload Trends Survey, which show that the boom in the sector has fizzled out.
Six out of ten sub-sectors reported falling workloads in Q2 2016, meaning workloads increased according to just two per cent, on balance, of the companies surveyed. This compares to a balance of 20% reported in Q1, and was the lowest balance since 2013 Q2.
In the roads sector, both motorways/trunk roads (-24%) and local roads (-17%) reported negative balances in Q2, following declines in the first quarter.
To compound matters, contractors report continuing difficulties recruiting skilled employees, with 43% and 34% of respondents reporting a dissatisfactory supply of staff and skilled operatives respectively.
Although contractors continue to report rising employment, this is likely to slow down if the market remains sluggish, and employment expectations for the next 12 months were the weakest since 2013 Q1.
Chief executive of the Civil Engineering Contractors Association (CECA) Alasdair Reisner said: “These results spell real trouble for the UK economy, and should act as a major warning sign to policymakers. We know that infrastructure investment is a driver of economic growth. Given the recent disappointing economic forecasts following the Brexit vote, our figures show that the market is slowing just as the country needs it to speed up.
“The new government can’t afford to sit on its hands. There are existing committed programmes of work where we need to see the delivery of schemes - now - if this situation is to be reversed. Unless the government kicks on to get spades in the ground, we will be looking at a dramatic slowdown in growth, which is bad news for the 200,000 people who work in our sector, and bad news for the economy as a whole.”
