Laing O’Rourke tops civils contractor league tables

Laing O’Rourke has won the largest amount of civil engineering contracts over the past 12 months according to Glenigan’s construction market analysis.

With an order book swelled by a £1 billion transformation of Manchester Airport, Laing O’Rourke edges Tarmac into second spot.

Tarmac has surged up the table after bagging a £1 billion contract for strategic roads resurfacing work.

Glenigan’s construction data shows that 71% of the orders won by value in the last 12 months at Laing O’Rourke are for civil engineering projects. This ratio is nearly 100% at Tarmac and also Costain, which is ranked sixth.

This time last year, the top civil engineering contractor by orders won was Balfour Beatty, which was buoyed by a package from the High Speed Two (HS2) rail link.

In the latest top 10, Balfour Beatty is ranked third with just over £1 billion-worth of civil contracts. These awards make up 59% of the group’s total order book.

Balfour Beatty’s latest order book includes a package from another major source of civil engineering work. The company has a £460 million package in joint venture with NG Bailey on the Hinckley Point nuclear reactor project.

Civils/building ratio

While some contractors have picked up more work, the total amount of civil engineering contracts awarded to the industry’s top construction companies has shrunk over the past year.

Glenigan’s construction industry data shows that the total value of orders won by the top 100 contractors in the 12 months to August 2018 was £7.7 billion.

This total is down by 29% compared to the 12 months to August 2017, when civil engineering contracts worth £10.8 billion had been let, including a £3.2 billion package of work on HS2.

As civil engineering orders have shrunk proportionately as a source of work, the overall value of combined building and civil engineering contracts won by the top 100 contractors has also dropped.

In the 12 months to August 2018, the combined order value of books at the top 100 contractors was £39.4 billion and 19.5% of this work was civil engineering related. A year earlier, the total value of construction orders at the top 100 contractors was £51.3 billion with 21% of this work identified by Glenigan’s construction research as civil engineering.

Prospects improving

Despite the slump in high value contracts, the prospects for the civil engineering sector are more positive at an underlying level.

Last year, Glenigan’s construction data shows that the underlying value of civil engineering projects starting on site slumped by 29%, but more work is now moving to site.

Allan Wilén, Glenigan’s economics director said: “The recent upturn in civil engineering activity is continuing, with the value of underlying starts during the three months to August 15% up against both the preceding three months (seasonally adjusted) and the same period last year. The year on year rise was driven by a 73% rise in utilities work.”

This research only includes projects valued at up to £100 million, but Glenigan expects a fall of just 3% this year before a rise of around 12% driven by stronger infrastructure work.