UK tunnelling bucks construction gloom

Despite the current economic uncertainty that has shrouded UK construction activity, the tunnelling industry seems to have escaped the slowdown. Excavation is about to start on Crossrail, work has begun on the Lee tunnel, HS2 has been given the green light and the Thames tunnel could also be given approval. And let’s not forget the recently completed Hindhead and Tyne tunnels. UK tunnelling has never had it so good.
In complete contrast, recent figures published by the UK-based Construction Products Association (CPA) have indicated that the UK economy retracted by 0.2% in the final quarter of 2011. In contrast to the 0.6% growth of the previous two quarters, the fall has been attributed to reduced levels of activity in both the construction and manufacturing sectors.

Yet the figures are only an average of all UK construction activity and, therefore, do not take into account the relative health of sectors such as tunnelling and some other infrastructure sectors. Included in the forecasts for ‘construction’ are private and public housing, public non-housing, repair, maintenance and improvement (RMI), commercial, industrial and infrastructure. Unfortunately, for non-tunnel related construction, the outlook remains grim.

CPA economics director Noble Francis stated: “The prospects looking forward are even worse, as construction is expected to fall a further 5.2% during 2012, exacerbating the problems in an industry that has already lost 300,000 jobs, and severely hindering growth for the economy as a whole. 

Mr Francis continued: “Undoubtedly, the problems in the euro zone have increased uncertainty in the private sector, making investors highly risk-averse to investment. However, this does not tell the whole story, as capital investment from the public sector, which accounts for more than one-third of total construction activity, will have fallen 30% by the end of 2013. As construction has been highlighted by government as essential for recovery, the decline is severely harming prospects for the sector, as well as constraining overall economic growth.”