PRLog (Press Release) -
Dec 29, 2009 -
This quarter BMI has introduced a new data series for infrastructure and its subsectors (transport and energy & utilities). This is an effort to address a significant deficiency in the availability of globally comparable, infrastructure-
specific indicators and forecasts across a wide range of countries. BMI's new infrastructure data series enables users to quantify trends and growth patterns in the infrastructure sectors of the 35 main emerging and developed markets out of the 62 countries in BMI's infrastructure service. Our data have changed over the last quarter to reflect a slightly more negative performance by the construction sector in 2009 than earlier anticipated, and a quicker-than-
expected recovery in 2010. We now estimate that the UK's construction sector contracted in real terms by 12.3% in 2009 (compared with our previous forecast of an 11.0% contraction)
. For 2010, we now expect the construction sector to expand by 0.5% in real terms, a dramatic improvement on our earlier forecast of a 4.6% contraction. This changed outlook for 2010 is largely determined by signs of a revival in the global economy in Q309 (albeit not yet in the UK economy itself) and by indications that the country's crucial housing market has bottomed out. Government capital investment will also lend significant support to our predicted renewal of positive growth in the construction sector in 2010. We predict that government capital investment will rise to GBP36.9bn in 2010, up from GBP35.0bn in 2009 and GBP31.4bn in 2008. There was bad news about two key projects over the last quarter. In the power sector, E.ON announced that it was delaying construction of the Kingsnorth coal-fired power plant by up to three years, while in the rail sector the Scottish government announced that it was scrapping the proposed US$340mn Glasgow Airport Rail Link (GARL), owing to budget constraints. However, despite the postponement of Kingsnorth, it has been another reasonably busy sector overall in the power sector, with a clutch of new projects and loan announcements, perhaps the most exciting of which is a US$1.65bn plan to link the power grids of the UK and Norway. Similarly, despite the abandonment of the GARL project, the rail sector has, overall, experienced a positive quarter, in terms of fresh activity. London's proposed Crossrail link secured a GBP1bn (US$1.65bn) loan from the European Investment Bank, while contracts were awarded for close to US$400mn of rail replacement work. Potentially the most significant development, however, was the announcement of a proposed US$55bn new high-speed West Coast railway linking England and Scotland, although at this stage the financing of this very long-term project remains open to question, especially given the likelihood of a belt-tightening Conservative government coming to power in 2010.
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