Inflation an obstacle to growth

A wide range of companies in the infrastructure sector have reported strong growth in 2023, particularly in revenue but this is tinged with inflationary pressures in the wider economy causing profits to drop.

The stabilisation of energy prices and supply chain issues in the construction sector have helped improve performance but there is still uncertainty ahead, as the UK economy is sailing close to a recession.

Another obstacle to growth is the increasing importance of skills shortages in the construction industry, with Currie and Brown reporting that skills are the primary threat to major infrastructure projects, with a predicted 8 3% increase in labour costs during 2023

Infrastructure is missing out on a largely untapped source of talent as only 15% of the construction workforce is female, so it is good to see Katy Dowding taking the helm at Skanska UK, the only woman to run a tier one contractor

Growth and optimism

Atkins

Atkins to expand environment practice by 50% in two years

Keltbray

Financial results for Keltbray show 35% turnover growth and a return to profit after two loss making years

HG Construction

HG Construction hits record revenue, up 38% but profit s ides

ISG

ISG bull sh despite mixed 2022 f nanc al performance reporting flat revenue and lower pre-tax profit figures for 2022

Keller Group

Keller Group shares jump as profit guidance revised higher Projects include metro tunnell ng in Melbourne and deep sewerage system in Singapore

Morgan Sindall

Morgan Sinda l upgrades prof t expectations for year

Mott MacDonald

Mott MacDonald wins design job on planned Overground extension

The proposed West London Orb tal l ne would run for 18km

Sector skills analysis

The labour and skills shortage is becoming apparent. So much so, the government took the unprecedented step of accepting recommendations from the Migration Advisory Committee for five construction occupations to be added to the “shortage occupation list” by the summer, enabling them to apply for a skilled worker visa to work in the UK.

Future skills for green jobs

Most students in the UK feel uninformed about the future green jobs that might be available to them, according to a survey of nearly 4,000 16-23-year-old students which named the North East as one of the worst places

Industry

‘faces stagnation’

if it does not plug the construction skills gap

A whitepaper published by The Future of Construction, a collaboration between Pagabo and The 55 Group has revealed that industry leaders be ieve that the sector faces stagnation if it does not p ug the construction skills gap and collaborate

The industry will grind to a ha t’ if the sector does not plug the construction skills gap

The whitepaper hopes to create a 'b ack box moment for the construction industry via a data sharing platform

Critical skills shortages in UK construction threaten major infrastructure projects.

Severe abour and skil s shortages n the construction industry could seriously affect the delivery of the UK’s national infrastructure pipe ine, according to a new report publ shed today by leading consultant, Currie & Brown.

The UK Construction market outlook report –indicates that 225,000 extra construction workers w ll be needed by 2027 to meet demand. Th s shortfa l is l kely to have severe repercussions for infrastructure pro ects across key sectors

Restructuring

2023 has seen many companies taking the opportunity to restructure their business to prepare for the challenges expected over the next few years.

‘The design team has gone from 500 to six ’ What HS2 Euston is do ng now

84% Industry leaders surveyed supported the idea of a construction industry black box

Skills shortages have overtaken material costs as the primary chal enge fac ng the construction sector But whi e headline inflation is eas ng, an acute construction skills shortage is predicted to drive an 8 3% increase in labour costs over 2023

Kier restructures infrastructure divis on. From July 1 the current Highways, Utilities and Infrastructure operat ons w ll become Transportat on and Natural Resources and Nuclear & Networks

McAlp ne finalises rejig with new sector MDs and 40 job cuts The reorganisation has been driven by a switch from a reg onal to a national sector-based operating model.

Laing O’Rourke plans to cut 200 staff jobs. The firm blamed the weakening market and delays in publ cly funded jobs for the planned redundancies, which will mainly impact the Dartford head office.

Wates restructures construction arm and sets up ma or projects business New d vision to target jobs worth £150m with f rm lined up for next major phase of Canada Water scheme

WSP staff shifted from mothballed HS2 Euston site to Old Oak Common