Onwards and Upwards for 2023:
Civil Engineering Forecast 2024 & Levelling-up the North
According to Glenigan’s forecasts, 2023 should witness a modest growth of 1%, while 2024 will see a 3% rise in Civil Engineering. This exciting promise of progress proves that the government are looking to accelerate their delivery of infrastructure projects. Crucially, in Civil Engineering, energy projects will be key in bringing growth to the industry. Though energy takes centre stage, elsewhere in the sector activity remains strong, with massive projects like HS2 contributing to the overall industry workload and funding flooding in from the £24 billion Road Investment Strategy (RIS2) – scheduled on site by the end of 2023.[i]
Network Rail’s CP6 programme will invest £28.1 billion combined between renewals and enhancement works over a five-year period up until March 2024. Scheduled to finish a month later is the metro extension to the west of Birmingham which will connect Wednesbury to Brierly Hill.[ii] Alongside the Sheffield Supertram renewal, the West Midlands metro project forms part of the City Region Sustainable Transport Settlements (CRSTS) – encompassing 8 city regions in the Midlands and North of England – for which a total of £5.7 billion has been pledged in the latest Spending Review.[iii]
Recent events in Europe have led to diminished gas supplies from Russia and have driven prices sky-high, confirming the UK’s need for improved energy security. A government white paper pre-dating the energy crisis set the intention to quadruple offshore wind capacity by 2030. The wind sector has thus far seen progress with the 2021 expansion of the Sofia Wind Farm and progress is scheduled to continue with major wind projects like Hornsea and Dogger Bank B and C.[iv]
Faced with a challenging trading environment due to the combined impact of Covid-19 and the war in Ukraine affecting prices and supply chains, the construction industry needs to be responsive, flexible, and proactive.
Glenigan recommends that Construction “identify and exploit new growth areas” which will differ to pre-pandemic days. “Structural changes are expected to create new opportunities in warehousing & logistics, office refurbishment and fit out.”[v]
Regionally, the north of England will receive greater investment, in line with ‘levelling-up’ targets.
Speaking of – have recent attempts to ‘level up’ the North have been successful?
The levelling-up fund allocations announced last year span across all regions.
However, despite being the worst performing economy of the UK – with the lowest gross disposable income per head – the North East was allocated only £100m for four projects, less than most other regions with the exception of London, Northern Ireland, and the East of England.[vi] For example, in the South East – where gross disposable household income is second only to London – £151m was allocated for 11 projects, clearly evidencing the disparity in north and south economic investment.[vii]
Fortunately, since the levelling-up funds were announced a year ago, increased infrastructure investment has been announced throughout the North, paving the way for regional rebalancing. In early December, Housing Secretary Gove revealed new measures to bolster his Levelling Up Bill.[viii]
For example, Morgan Sindall has recently formed a North East operation, headed by Alex Isted, with a new regional office anticipated to generate over 25 jobs overseeing landmark projects throughout the North East and Cumbria.[ix] In Yorkshire, Vinci has the go-ahead for levelling-up Hull, securing a start date of Autumn 2023 for the £96 transformation of city-centre Albion Square.[x]
“Transport and skills have been named as top levelling up priorities for North of England” says New Civil Engineer’s Hakimian, though critics have claimed that these improvements alone will not rebalance the UK, and that a more holistic approach focusing on people and social ascent will achieve greater results.[xi] Moreover, focusing on transport and skills, both in the short and long-term, means that other priorities have been pushed down the agenda, like Net Zero targets.
Alongside environmental concerns, though, the issue of levelling up is critical, relevant, and deserving of its prioritized position, despite government attitudes suggesting otherwise (retracting its promise to deliver high-speed rail between Liverpool and Hull mere weeks after its announcement, for example).[xii] In response to the release of the Government’s ‘Levelling Up’ white paper from February this year, Atkins, the University of Durham and Northern Powerhouse Partnership (NPP) have co-authored a report called Regional Rebalancing.[xiii]
The commission is an independent study into four key areas of the North – Teesside, Liverpool City Region, West Yorkshire and an area which the report terms “the M6 Corridor”, encompassing Carlisle to the North and to the South, Crewe.[xiv]
The report makes some perceptive claims, right down to the political semantics of ‘levelling up’ itself – noting in its executive summary that ‘rebalancing’ is a preferred term across most interviewees, because it extends beyond purely infrastructure projects.[xv] It also notes how confidence is lacking with regards to anticipated progress over the next 10 years – with the report arguing that this very recent change in disposition has both Covid-19 and the cost-of-living-crisis to blame.[xvi]
Alongside infrastructure improvements in the North East and Yorkshire, in the North West new plans are being announced too. In Preston, for example, Eric-Wright have the go-ahead on a £45m council-funded new cinema complex called Animate.[xvii] Partnered with Maple Grove Developments, the council will develop Preston’s former indoor market site into a leisure complex with an eight-screen cinema, five bars and restaurants, a street food hub and a bowling alley. Animate’s anticipated completion date is winter 2024.[xviii] Remarkably, once completed, the scheme will be publicly owned, constituting a “strategic public asset” according to City Council Cllr Matthew Brown, while chair of Preston Towns Fund Board John Chesworth has coined the project a “cornerstone” investment – cause for much optimism about levelling up activities throughout the North, surely?[xix]
[i] Glenigan Construction industry Forecast 2023-2024
[ii] Ibid
[iii] Department of Transport, “City Region Sustainable Transport Settlements: confirmed allocations,” GOV.UK, https://www.gov.uk/government/publications/city-region-sustainable-transport-settlements-confirmed-allocations published 4 Apr 2022.
[iv] Glenigan Construction industry Forecast 2023-2024
[v] Ibid
[vi] Tom Keighley, “North East economy was worst performing in the UK, new data shows,” Business Live, https://www.business-live.co.uk/economic-development/north-east-economy-worst-performing-24113369 31 May 2022.
[vii] Aaron Morby, “Regional levelling-up projects – full list,” Construction Enquirer, https://www.constructionenquirer.com/2021/10/27/regional-levelling-up-projects-full-list/ Oct 2022; “The north-south pay gap: what do people earn where you live?,” The Guardian, https://www.theguardian.com/news/datablog/2010/mar/31/economy-economics
[viii] Aaron Morby, “Gove calls for Competition Probe into House Building” Construction Enquirer, https://www.constructionenquirer.com/2022/12/06/gove-urges-competition-watchdog-to-review-house-building/
[ix] Ibid
[x] Ibid
[xi] Rob Hakimian, “Transport and skills have been named as top levelling up priorities for North of England,” New Civil Engineer, https://www.newcivilengineer.com/latest/transport-and-skills-named-as-top-levelling-up-priorities-for-north-of-england-21-10-2022/ 21 Oct 2022.
[xii] Ibid.
[xiii] Richard Robinson, “Regional Rebalancing, SNC-LAVALIN, https://www.snclavalin.com/en/beyond-engineering/regional-rebalancing Oct 2022.
[xiv] Ibid.
[xv] Ibid.
[xvi] Ibid.
[xvii] Julia Hatmaker, “Eric Wright gears up for £45m Animate start in Preston,” North West Place, https://www.placenorthwest.co.uk/eric-wright-gears-up-for-40m-animate-start-in-preston/ 21 Oct 2022.
[xviii] Ibid.
[xix] Matthew Brown and John Chesworth, quoted in Julia Hatmaker’s, “Eric Wright gears up for £45m Animate start in Preston,” North West Place, https://www.placenorthwest.co.uk/eric-wright-gears-up-for-40m-animate-start-in-preston/ 21 Oct 2022.
